So far in New Hampshire, the Fed’s interest rate cut in September that was meant, in part, to ignite a more balanced housing market by lowering home mortgage interests has been a dud.
On Sept. 18, the Federal Reserve announced a 50-basis point (bps) interest-rate reduction, marking the first cut in four years. And the mortgage market responded … for a little while.
Realtor.com data shows that, by Oct. 8, the average 30-year fixed mortgage in the Granite State was down to 6.40%. But by the beginning of November, that rate had risen to 7%.
“It took 10 months of 2024 for the Fed to cut rates 50 basis points. While we waited for these predicted cuts, mortgage rates were actually coming down from the high of 8% in November of 2023. During this time, home prices continued to increase and buyers continued to buy,” said Joan McIntire, president of the New Hampshire Association of Realtors (NHAR).
“Unfortunately,” she added, “we are not seeing the substantive increase in supply that is needed to achieve a balanced market. An increase of existing home sales will help, but what is really needed is new housing. With a predicted shortfall of 60,000 housing units by 2030, buyers will continue to find few choices and high prices when looking for a home.”
A “basis point” in interest rates is a unit of measurement representing 1/100th of a percentage point. So, when the Federal Reserve announced a 50 bps reduction, that translated to a half percent or 0.5%.
On Nov. 6, hot on the heels of the national presidential election, the Fed, as expected, cut the rate again, but by only half as much as September. It shaved off 0.25 percentage points.
The hope with lower mortgage rates was that current owners — who’ve been sitting on the sidelines the past few years — would be motivated to put their homes on the market as they went shopping for a new home themselves. More homes on the market might increase supply, thereby reducing demand, easing prices, and making a home purchase generally more affordable.
But, like the interest rates, the affordability hasn’t changed much.
The October residential real estate report from NHAR shows that affordability remains an issue in the New Hampshire housing market.
A data point called the affordability index uses 100 as the indicator that a family with an average median income has just enough money to afford a house or condo in a particular market. The lower the number from 100, the less affordable the property.
New Hampshire’s affordability index in October, according to NHAR, was 61 for a single-family home and 77 for a residential townhouse/condominium. The index for a house reached an all-time low of unaffordability, 55, in June.
The median price of a house improved a bit from September. The NHAR reported an October single-family median of $500,750, down from September’s $515,000 but an increase of 4.6% from October 2023.
Condos in October, on the other hand, reached a 2024 high of $430,500 in the Granite State, up 7% from 2023 and up significantly from September’s median of $403,000.
Another important measure of the availability of housing is months supply. Months of supply is the number of months it would take to sell all current listings on the market if no new units were added. In a balanced number, the months of supply would be four to six months.
The months of supply in New Hampshire for a single-family in October was 2.3, while the months supply for a condo was 2.1, according to the NHAR.
“The housing affordability and availability issue seems to be in the news every day,” said McIntire, noting that housing affordability has been a catchphrase for any number of campaigns during this year’s election cycle. The NHAR does not make endorsements in political campaigns. McIntire remains convinced, as she has expressed throughout her 2024 presidency, that easing restrictive local zoning is a true solution to more supply.
“Candidates at the state and national level recognize that it is a problem that is not going to be remedied on its own. My sincere hope is that 2025 will yield the zoning changes we need to give first-time buyers the opportunity to invest in New Hampshire by purchasing their first home,” said McIntire, an associate broker at Coldwell Banker J. Hempe Associates in Concord.
With his return to the White House as president in January, Donald Trump is almost certain to hector the Fed to reduce rates at a greater and faster pace, much as he did in his previous term.
It remains to be seen what effect he and his administration will have on interest rates and the economy in general.
Analysts had suggested that the Fed in 2025 would cut those basis points by 25 in the first quarter, then another 25 in the second quarter.
With Trump’s win, however, there is speculation that might pause its interest rate reduction schedule as a hedge against whether the new Trump administration’s direction on the economy has a positive or negative effect on inflation.
Here are the median prices by county of single-family homes in October:
- Belknap, $505,750
- Carroll, $475,000
- Cheshire, $397,000
- Coos, $297,450
- Grafton, $439,500
- Hillsborough, $510,000
- Merrimack, $470,000
- Rockingham, $628,000
- Strafford, $441,000
- Sullivan, $431,250
Here are the median prices by county of condominiums in October:
- Belknap, $450,000
- Carroll $339,000
- Cheshire $275,000
- Coos $425,000
- Grafton $415,000
- Hillsborough $390,000
- Merrimack $350,000
- Rockingham $549,140
- Strafford $349,000
- Sullivan $0 (no sales recorded)
In the state’s most expensive region — the Seacoast — the median price of a single-family home was $903,500 in October, 34.8% from 2023 and only the second time in 2024 that the median has topped $900,000, as reported by the Seacoast Board of Realtors.
The board takes its data from the sample communities of Exeter, Greenland, Hampton, Hampton Falls, New Castle, Newfields, Newington, North Hampton, Newmarket, Portsmouth, Rye, Seabrook and Stratham.
It said there were a total of 67 single-family sales. Of that number, 30 sold for $1 million or more. There were seven sales of homes priced at $400,000 or less.
The median price of a condominium in the region was $540,050, an increase of 3.8% from 2023.
