Um, yeah. I know it’s Tuesday.
Anyway.
According to the National Association of Realtors, residential sales in September dropped by 30% compared to last year, and the affordability index hit an all-time low. And a recent article in Yahoo Finance, originally published in Fortune, suggests 2023 is shaping up to be the worst year for home sales since 2008—due to a combination of high mortgage rates and low inventory. The total existing -home sales in 2023 are projected to be around 4.1 million, the lowest since the subprime mortgage crisis of 2008.
THE AFFORDABILITY CRISIS
The affordability index in New Hampshire was recorded at 59 for the second consecutive month, which is the lowest point in NHAR’s recorded history—the state’s median household income is just 59% of what is necessary to qualify for a median-priced home under current interest rates. A resident would need to make approximately $69,920 per year to afford a single-family residence without spending more than 30% of their income on rent or a mortgage payment. The average annual wage in the state is $51,040, which is more than $18,000 less than what you need to afford a place to live. For potential buyers, this basically means you need to make more money.
THE IMPACT OF INTEREST RATES
Interest rates are now floating around 7%, which has taken some buyers out of the market. The rise in interest rates is a “double whammy” for buyers, as it comes on top of already high sales prices. If you talk to a lot of real estate agents you’ll often hear the phrase “date the rate, marry the house,” which is just a fun rhyming way of saying don’t worry about the interest rates. And then, there is the “lock-in-effect,” where existing homeowners, who bought when rates were low, are releuctant to reenter the market as mortgage rates climb, which contributes to the low inventory and the slowing down the number of sales.
FORECLOSURES
Nationally, foreclosures are also on the rise. August saw 33,952 housing units having foreclosure filings, and this is nearly a 2% increase from the previous year. Foreclosures are probably on the rise due to the expiration of COVID-era government initiatives like foreclosure moratoriums and loan forbearance. Also, the high mortgage interest rates are exacerbating the situation. And I’ve been seeing a lot of emails flying my way asking if I want to take bank-backed training in taking these listings on. New Hampshire ranks 33rd for the highest foreclosure rate. 93 of our 634,480 homes have gone into foreclosure, resulting in a rate of one in every 6,844 households.
INVENTORY AND SUPPLY
While the affordability crisis continues, October’s supply of homes have increased in New Hampshire by 11%, and new listings were ahead of last September by 2%. According to a Paul Briand article in the NH Business Review, NHAR economists think the squeeze on residential real estate supply will likely ease next year, attracting more buyers to what has been a sellers’ market.
ZONING AND REGULATORY CHALLENGES
But Briand’s hopefulness is somewhat dashed by Fred Kocher. Executive Director of New Hampshire Housing Rob Danforth explains that we need almost 60,000 new housing units between 2020 and 2030 to meet the current population growth, and zoning laws make it difficult to build starter homes and multi-family units, limiting options for potential homeowners.
CONCLUSION
You know, I’m often asked, “If I sold my house, where would I go?”
The real estate landscape in New Hampshire is complex and ever-changing. From the affordability crisis to rising interest rates, from foreclosures to zoning challenges.
The “If I sold my house, where would I go?” question is a valid concern, but also a question that can be navigated with the right guidance. If you need to move, you need to move—perhaps you find yourself in a home that no longer aligns with your life’s current chapter. Maybe your family has grown, you job has changed, or you’re eyeing retirement; whatever the reason, you’re essentially in the wrong house for your current needs. The current market conditions might be tough, but they’re not insurmountable. By understanding the market and your options, you can make informed decisions that align with your personal and financial goals.
Are you ready to make a change? Reach out to me for a personalized consultation. Together, we’ll navigate this complex market and find the right home for your next chapter.
