Low supply driving home prices up
By MICHAEL COUSINEAU
New Hampshire Union Leader
July 13. 2018 6:48PM
A woman touring a Newmarket house for sale told Realtor Rachael Eames she couldn't get too emotionally attached because she kept losing out to higher bidders.
"I fall in love, but I can't fall in love too far," Eames recalled the mother of three saying last week.
Potential buyers last month found 17 percent fewer single-family homes on the market - 1,162 fewer - compared with a year earlier, according to the New Hampshire Association of Realtors.
Less supply helped boost the median sales price to another monthly record high: $295,000 in June.
(Median is the point where half the homes sell below that amount and half above it.)
"Somewhere around $70,000 is probably the family income that would be necessary to qualify for a mortgage to buy a house at that rate, assuming you have a small down payment," said Dean Christon, executive director of the New Hampshire Housing Finance Authority, which promotes and finances affordable housing.
The statewide median household income stood at $70,936 in 2016, ranking New Hampshire as the eighth-highest among the states, according to the U.S. Census. A separate Census survey gave New Hampshire a median household income of $76,260, the nation's highest.
High housing demand plus rising prices and creeping interest rates are putting pressure on more home buyers, Christon said.
"Clearly, it's becoming less affordable," he said. "I don't see anything to lead me to believe we won't see upward pressure on purchase prices in the next six months to a year."
Interest rates are rising but remain below historical norms, he said.
Rates for a 30-year fixed-rate mortgage hit a U.S. weekly average of 4.53 percent as of Thursday - a half-point higher than a year ago, according to Freddie Mac, a company that guarantees mortgages by buying and repackaging them to investors.
New Hampshire's median sales price stood at $280,000 for the first half of 2018, or $15,100 higher than the same time last year.
June's statewide milestone eclipsed May's revised figure of $284,500.
Eames, who called the rising prices "absolutely phenomenal" and "crazy," said the June number might be explained by larger family homes selling in June.
Families "try to close in June and July because they want to get in and settled before school starts," said Eames, immediate past president of the New Hampshire Realtors, who operates Eames Realty Services in Concord and Newmarket.
Median prices varied greatly around the state in June.
Hillsborough County, which includes Manchester and Nashua, stood at $314,950, or 5 percent higher than a year ago. Rockingham County, which includes the Seacoast, had zero growth year-over-year with the median price at $370,000.
Sullivan County, which includes Sunapee, was the only county in the state to see a year-over-drop in June, with prices declining by $48,750, or 22.4 percent, to $169,250.
Coos County, which includes Berlin, remained the least expensive county, with the median price at $107,000, or 3.3 percent higher than in June 2017.
Builders also aren't keeping up for demand for new housing, Christon said.
Rental rates also are climbing, creating an "interesting double-edge impact" for renters.
Rising rents may make people consider buying a home, "but if they're spending more for rent, their ability to save for a down payment is reduced," he said. "That makes it more difficult for people to access the market."email@example.com