![Ben Cushing and Lawrence Yun](https://www.nhbr.com/content/uploads/2023/10/j/j/ben-cushing-and-lawrence-yun.jpg)
Ben Cushing, left, president of the New Hampshire Association of Realtors, stands alongside Lawrence Yun, chief economist for the National Association of Realtors, after Yun provided market updates and forecasts to brokers in the Granite State. . (Photo provided)
The National Association of Realtors (NAR) chief economist tells New Hampshire brokerages that the tight supply of residential real estate will likely ease next year, attracting more buyers into what has traditionally been a seller’s market. I expected it to be.
The big “what if” is whether mortgage rates start to fall from their current 30-year fixed rate of 8.5% or higher, said Lawrence Yun, NAR’s chief economist.
“We had a huge real estate boom in 2020 and 2021. But as you know, once the Fed started raising interest rates, that started to hamper some of the purchasing activity. Sales were about 20% lower than the previous year. % decrease,” Yun said.
If inflation improves in the coming months, Yun said, “it will allow the Federal Reserve to consider lowering interest rates, and then lowering mortgage rates.”
Yun spoke about market updates and forecasts he provided to the New Hampshire Association of Realtors (NHAR) at its educational symposium last month. Yoon summarized his remarks in a video he created with NHAR Chairman Ben Cushing and posted on NHAR’s website (https://www.nhar.org/news/article/inventory-coming).
Data shows that affordability continues to be a challenge in New Hampshire’s residential real estate market. The supply of available housing is thin, demand is high, prices are rising steadily, and interest rates continue to rise.
Add all this up and the affordability index stands at 59, the lowest ever, according to NHAR’s monthly report.
On the affordability scale, 100 means potential homeowners in a given market have enough money to buy, mortgage, and insure a home. The lower the index, the less affordable the market is.
New Hampshire’s single-family home affordability index has steadily declined through 2023, hitting record lows of 59 in August and September, up from 77 in January. Residential condo affordability has improved, but only in relative terms, starting at 93 in January and dropping to a historic low of 71 in September.
The median home price in September was $490,000, just $9,000 shy of June’s all-time high of $499,000, according to the NHAR report. But condo prices reached a record high of $405,000 in September.
On average, it takes just one month for a home to go on the market. For residential buildings it takes 23 days and for condominiums it takes 22 days.
In terms of supply, a six month supply is usually considered healthy. New Hampshire’s September measurements were 2.0 for homes and 1.6 for condos.
“I think the issue right now is rising interest rates,” said John Rice, a broker at Tate & Foss Sotheby’s International Real Estate in Rye. “I think that combined with low inventory is holding down sales volumes. If the open house activity is any indication, we’re certainly interested. But people are now looking to raise funds. I have to think about it carefully.”
Mr. Rice maintains data that is part of the Seacoast Board of Realtors’ monthly reports. According to his September data, he sold just 58 homes (an all-time low for September), with a median price of $757,500. The median condo price in the Seacoast market was $600,000, the highest since January’s all-time high of $661,898.
The Seacoast Commission obtains data from sample communities in Exeter, Greenland, Hampton, Hampton Falls, New Castle, Newfields, Newington, North Hampton, Newmarket, Portsmouth, Rye, Seabrook, and Stratham.
“Interest rates are definitely a factor in our modest volumes,” said Jessica Ritchie, president of the Seacoast Board of Realtors at Great Island Realty in Portsmouth. “However, open houses are still crowded and there is certainly consistent demand for waterfront properties.”
Rockingham remains the most expensive of the state’s 10 counties, with a median reported price of $620,000 in September. The next closest was Hillsboro at $510,000.
Sullivan was the most expensive condo at $575,000, followed by Rockingham at $487,000.
Rising interest rates have a dramatic impact on the affordability of new homes, said Joanie McIntyre, an associate broker at Coldwell Banker J. Hampe Associates in Concord.
“A $400,000 mortgage two years ago at a 3% interest rate would cost more than $1,600 a month. A $400,000 mortgage today would cost more than $2,600 a month at a 7% interest rate. ” said McIntyre, NHAR’s next president in 2024.
Despite the challenges of buying, she believes investing in a home is worth the effort. “Purchasing a home continues to be a good investment. Homeownership builds wealth for generations. We also believe it helps build strong communities,” she said.
Yun said there is a lot of demand.
“I think there are a lot of pent-up sellers.” — Homeowners who are essentially living in the wrong house, people who are considering life changes and whether or not to add more children to their family, people who are looking for a better school district, people who are retired,” Yun said. said.