The path to home ownership in New Hampshire has turned into a labyrinth

As rents and prices rise, saving to buy a house ‘is getting more challenging’

Businesswoman Stands Inside To A Large Complex Labyrinth. With Challenges

One path to owning a home is to rent an apartment and save money for the down payment on a single-family house. But renters along that path in New Hampshire are finding rocks and hard places, and they’re stuck.

According to Rob Dapice, executive director and CEO of New Hampshire Housing, New Hampshire renters are having a tough enough time affording current rents, making saving money especially difficult. And, even if they’re in a position financially to buy their first house, they find a hard place in a residential real estate market of rising prices, higher interest rates, and short supply.

“There is a much higher percentage of renters than there was 10 or 15 years ago, and we see that as an indication that people are having a harder time buying that first home,” says Dapice, citing new agency data. “So the narrative where people are able to rent for a while, decide where they want to live and settle down and buy a home is getting more challenging.”

The economic principle of supply and demand complicates the markets for both renters and homebuyers. As supply is squeezed, demand and prices go up.

Vacancy rates for apartments have been on a general decline over the years.

In 2013, the vacancy rate was above 3 percent. Last year, according to New Hampshire Housing’s 2022 Residential Rental Cost Survey Report, availability dropped to 0.3 percent for a two-bedroom unit and 0.5 percent for all rental units.

According to the report, a vacancy rate of 5 percent is considered a balanced market for tenants and landlords. In comparison, the vacancy rate nationally is 5.8 percent and in the Northeast it is 4.9 percent, according to the U.S. Census Bureau data cited by the report.

Meanwhile, prices increased. The average gross monthly rent was $1,076 in 2013; it was $1,584 in 2022, according to the cost survey report. Gross rent is up 5.7 percent over last year.

Hillsborough County has the highest average rent of $1,858 per month for a two-bedroom, according to the data, an increase of 34 percent from 2017-2022. Next was Rockingham County at $1,708, up 21 percent, then Grafton County at $1,693, up 48 percent, Strafford County at $1,592, up 36 percent, Merrimack County at $1,318, up 12 percent, Belknap County at $1,275, up 24 percent, Carroll County at $1,251, up 20 percent, Cheshire County at $1,233, up 16 percent, Sullivan County at $1,224, up 26 percent, and Coos County at $954, up 17 percent.

“To afford the statewide median cost of a typical two-bedroom apartment with utilities, a New Hampshire renter would have to earn 131 percent of the estimated statewide median renter income, or over $63,000 a year,” Dapice writes in the introduction to the report.

New Hampshire Housing is in the process of compiling data for its 2023 Residential Rental Cost Survey Report, which it will issue in July. Owners and managers of rental property are invited to contribute to the report by taking a brief survey that can be found at

Affordability challenge

On the single-family home side, the supply also has been squeezed over the last several years, driving up demand and the median purchase price.

The median price of a single-family home hit an all-time high of $460,000 in the Granite State in May and June of 2022, according to NH Hampshire Association of Realtors data. Months supply of inventory was down to 1.2 in May. It is generally considered that a 6.5-month supply is an indicator of a balanced housing market.

In December, NHAR data showed the median price of a house had moderated down to $425,000 while the months supply of inventory stood at 1.3.

But affordability remains a challenge in the ownership sector. NHAR’s December report showed an affordability index of 73, compared to 101 in December 2021. An affordability index value of 100 indicates that the typical median-income family has exactly enough money to qualify for a home. Any value below 100 means that a family may struggle to qualify for a mortgage on a home in a particular area. The lower the value, the greater the struggle to afford the mortgage.

For example, in an area with an affordability index of 70, a median priced house of $400,000 would require annual wages of $61,542 to afford a monthly mortgage of $2,264.

In January, the NH Council on Housing Stability received a report, “How Much Housing Does NH Need?” prepared by Jen Czysz, executive director, Strafford Regional Planning Commission; Noah Hodgetts, principal planner, NH Office of Planning and Development; and Heather McCann, director of housing research for New Hampshire Housing.

The report cited the need right now for an additional 23,669 housing units in the state – 12,764 homes and condos and 10,905 rental units.

The number of housing units added in the state was 67,730 between 2000 and 2010. That dropped to 24,041 between 2010 and 2020. Through 2030, the state is projected to need 59,934 units, then another 28,461 between 2030 and 2040.

It’s a bit of a chicken-and-egg quandary to decipher what’s needed first to alleviate housing strain. Will a better residential housing market improve the rental market? Or will a better rental market help the residential market?

“I think it’s clear that the effects of the current environment – the scarce housing supply, the increase in prices – is affecting lower income and more vulnerable people most severely,” says Dapice. “So I think there’s a serious need for more housing of every type, but I think the need for rental housing – and particularly rental housing that’s affordable, whether that’s subsidized or not – is most critical.”

New Hampshire Housing is not a state-funded agency, and it provides data and information that can help shape state policy when it comes to tenants and homeowners, says Dapice.

“We are certainly talking to policymakers, and we hope that the information that we publish – the data that we try to present in clear and understandable form – helps inform their decisions and conversations,” says Dapice.

The agency is tracking with interest a few pieces of legislation through the current 2023 session:

  • Senate Bill 202, which would establish and appropriate money for a homeownership innovations fund at New Hampshire Housing
  • SB 231, which would establish a historic housing tax credit, make appropriations to the NH Department of Health and Human Services to support emergency shelter programs and make appropriations to the New Hampshire Housing and the NH Department of Business and Economic Affairs to support workforce housing and affordable housing;
  • SB 145, which would establish a New Hampshire Housing Champion program, with a housing production municipal grant program and a housing infrastructure municipal grant and loan program. The bill also establishes positions in the Department of Business and Economic Affairs and makes appropriations for the programs
  • House Bill 44, which would require that local legislative bodies permit by right certain single-family lots in residential districts to be used for up to four residential units.

Meanwhile, New Hampshire Housing is holding a Homeownership Conference on Wednesday, March 8, at the Manchester Country Club.

Presentations include:

  • CoreLogic Housing Economist Molly Boesel
  • Employer-Built Housing for Health Care Facility Staff presented by Harmony Homes (See the NHBR story about the Randolphs of Harmony Homes here.)
  • Off-Site Built, Customizable, Energy-Efficient Modular Homes presented by Module Housing
  • The Present & Future of 3D Printed Homes

For more information about the conference, visit

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