BEDFORD — New Hampshire homeowners enjoyed an average $260,000 in home equity at the end of 2022, giving them an off-ramp to sell if family finances worsen.
“One thing it does is it provides a financial buffer for homeowners,” Molly Boesel, principal economist at CoreLogic, told a home ownership conference Wednesday.
“If these homeowners do fall behind on their payments, they’ll have their home equity to fall back on and most likely not fall into foreclosure,” Boesel said at the conference, organized by New Hampshire Housing.
“It also provides funds for other things, like remodeling,” through home equity loans.
Boesel shared statistics showing homeowners in Rockingham and Strafford counties averaged nearly $300,000 in home equity per borrower — essentially the home’s value minus the amount of the outstanding mortgage.
The average equity was nearly $250,000 in the Manchester-Nashua area and nearly $225,000 in Concord.
The nationwide average is nearly $300,000, fueled by richer real estate markets including Hawaii ($638,000 in equity), California ($581,000) and Massachusetts ($392,000).
In 2010, 26% of mortgages had negative equity in the United States, meaning more was owed than the home was worth. The latest figure, to be released Thursday, puts that rate at 2.1%.
“Home prices would have to fall 40% from where they are now to get back to that 26% negative equity number,” Boesel told more than 200 attendees at the Manchester Country Club. “No one has home prices going down 40%.”
Meanwhile, freshly released sales figures for New Hampshire showed only 559 home sales were finalized in February, the fewest for any month since January 2011, according to Dave Cummings, spokesman for New Hampshire Realtors.
The median sale price was $425,000 in February, $10,000 higher than in January and $20,000 more than in February 2022, according to New Hampshire Realtors. The total number of sales was down 19.6% from a year earlier.
February saw 20% fewer new home listings than a year ago.
Boesel said home prices in New Hampshire are forecast to rise 4% in 2023, compared to 1% nationwide.
Heather McCann, director of housing research at New Hampshire Housing, said the state needs more homes to go up for sale.
“High home prices coupled with the rising interest rates have shut many first-time homebuyers out of the market, so it’s not great news, but the lack of inventory has created a brutal housing market,” McCann said.
She said about 30% of homes bought in New Hampshire last year were purchased by people living out of state, compared to 25% to 26% in some previous years.
“Definitely more out-of-state buyers, but overall, a modest increase,” McCann said.
McCann cited federal figures showing about 20,000 people from Massachusetts moved to the Granite State between 2019 and 2020, representing about 42% of the total people moving here, only a slightly higher rate than in the previous years.
A recent University of New Hampshire poll showed only 3% of state residents surveyed last month believed now was a good time to buy a house, while 62% believed it was a bad time. Another 31% were neutral.
Higher home prices and interest rates have swelled monthly payments for recent borrowers.
“Just that double whammy, like I’ve said, of rates and home prices increasing have priced so many people out of the market,” Boesel said.