Rising housing costs are constraining budgets in NH, leaving families with less money for other essential expenses and limiting economic growth. Higher costs dampen the economic mobility of NH residents and can be a barrier to families looking to move into the state. As a result, ongoing housing constraints threaten population growth, workforce expansion, and the diversity of economic activity in NH.
Higher Costs
The cost of purchasing a home in NH reached record highs in 2024, with the median price of a single-family house reaching over $500,000 for 10 months of the year. While prices tend to peak during the summer, early data suggest this trend will continue into 2025, exacerbating challenges for prospective homebuyers.
At the same time, NH’s median income has not kept up with rising housing costs. From 2019 to 2023, the state’s median income increased by approximately 24.3%. However, during the same period, the median sale price for a single-family house grew by 56.7%. As a result, households earning at or below the median income face even greater difficulties achieving homeownership, keeping more families in an increasingly expensive rental market.
Housing costs may disproportionately impact renters, who tend to have lower incomes compared to homeowners. In 2023, the median income for renter households was nearly $54,000, less than half of the $115,000 median income among homeowner households.
Renter households are also more likely to be cost burdened, with over half paying more than 30% of their incomes toward rent and utilities. The median two-bedroom apartment, including rent and utilities, cost $1,833 per month, a 36% increase from 2019.
Increased Housing Instability
Beyond facing higher cost burdens and lower median incomes, renters are disproportionately more likely to live below the federal poverty guidelines. According to 2019-2023 U.S. Census Bureau data, the poverty rate among the state’s renter households stood at 12.6%, nearly five times higher than the 2.6% poverty rate among homeowner households.
However, rising housing costs are also impacting homeowners, and the number of homeowners living in poverty has increased since the pandemic. According to 2019-2023 data, homeowner households represented nearly 48.4% of those in poverty, up from 34.5 % in 2014-2018.
Rising costs and limited opportunities for homeownership could explain the increase in homelessness since the start of the COVID-19 pandemic. According to the NH Coalition to End Homelessness, the number of Granite Staters who were unhoused increased by 52.1% between 2022 and 2023, based on Point in Time data taken on a single night in January of each year. This was the largest percentage increase recorded across the country.
Limited Inventory and Future Challenges
Low housing inventory and vacancy rates across the state continue to drive up costs for both homeowners and renters. A balanced single-family housing market typically requires about 6.5 months of available inventory, according to researchers at Texas A&M University. However, NH had an average of just 1.9 months of housing inventory in 2024. While that was an increase from 1.5 months in 2023 and 1.4 months in 2022, the rising prices reflect that the growth in supply is not outpacing demand.
Similarly, in the rental market, a vacancy rate of 5% is considered balanced, according to NH Housing, the state’s housing finance authority. The most recent data from 2021-2023 showed vacancy rates in NH consistently falling below 1%.
The current 2024-2025 State Budget included crucial one-time investments to support housing development in NH. Allocations for the state’s InvestNH program and Affordable Housing Fund were designed to support the construction of housing for both homeowner and renter families with low and moderate incomes. In addition, state investments were made toward the Housing Champions Program to provide incentives to municipalities looking to make changes to their zoning laws. However, these investments may not be repeated in the 2026-2027 budget.
Without continued investment in housing solutions, NH may struggle to meet growing demand, leading to continued financial strain on families and long-term consequences for economic growth.
Jessica Williams is policy analyst with NH Fiscal Policy Institute, a nonpartisan, independent research nonprofit that examines issues related to the state budget, the economy, policy decisions, and the financial security of Granite Staters.
