December 7, 2023
*Source: NH Union Leader & NHAR Market Data
Today, the NH Union Leader reported that Single-Family Home Sales in NH are the lowest they’ve been since 2011. Record high home prices and higher interest rates have slowed the market down considerably by making housing more unaffordable. Higher interest rates have also deterred sellers from listing their homes for sale (mainly because they’re most likely locked into lower more comfortable rates).
I hear from a lot of sellers saying, “Where are we going go if we sell?”, referring to the lack of housing inventory. If rates continue to hover around where they are today, I predict that inventory will improve in 2024, and home prices will remain flat or possibly even fall a little bit. For some of my recent listings, buyer traffic has been very light and we’ve received far less offer traction averaging between 1-3 offers. One of my listings has had a consistent amount of showings, but no offers yet.
Affordability is the key metric to watch moving forward. As of October 2023, the Affordability Index registered at 58 for Single-Family Homes in the state. The Affordability Index measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home based on the most recent price and income data. The lower this number is, the more unaffordable housing has become. Subsequently, the higher this number is, the more affordable housing is. For benchmark’s sake, an Affordability Index of 100 means that a family earning the median income in the state has more than enough income to qualify for a mortgage. The Index does assume that a buyer has 20% for a downpayment.
I’m hoping that 2024 will bring much needed relief in the housing sector & will start trending us towards a more balanced market.