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New Hampshire Population Growth Has Slowed Dramatically
The past 6 years has been the period with the slowest population
growth in New Hampshire in the past 30 plus years.
While Our Rate of Population Growth Has Slowed,
We Have Not Stopped Aging
Based on Current Population Projections Growth Remains Slow,
And We Continue to Age
New Hampshire Job Growth Has Also Slowed
Annual job growth in New Hampshire has been less than 1% each
year since the end of the recession. By comparison, Massachusetts
has grown at about 1.4% in each of the past three years.
The Quality of New Hampshire Employment Has Changed
Average annual employment in Manufacturing declined by 35% between
2000 and 2013, while employment in Education and Health Services
increased by 28% and Leisure and Hospitality increased by 11%.
Job Quality Can Be Expressed by Weekly Wages
Much of the job loss in Manufacturing came with higher wages, while
increases in employment in Education, Health Services, Leisure and
Hospitality are at lower wages.
The Home Ownership Rate in New Hampshire Remains High
In 2005 after more than a decade of economic growth the home ownership
rate in New Hampshire had reached a peak of 73%, with renter households
making up the remaining 27%. Since then the ownership rate has declined
slightly.
But, Recent Growth Has Been in Renter Households
The growth in renter households in New Hampshire has been
significant in recent years, growing by nearly 13% since 2005, after
declining by 5% between 2000 and 2005.
After Age 34 New Hampshire Households Are Predominantly
Owners, And We Remain Mostly Owners Into Old Age
65% of households age 35 to 44 are owners, 77% of households 45 to 54
are owners, and more than 80% of households age 55 to 64 and 65 to 74
are owners. For Households 75 to 84 the percent of owners declines slightly
to 77%. But, even for households 85 and over, the ownership rate is 61%.
NHHFA Study
Housing Needs and Preferences in New Hampshire
including
Independent and Assisted Living Need Indicators for an Aging Population
Purpose:
• Update the existing housing production needs model to better reflect changes
in demographics and employment;
• Produce a qualitative analysis of housing preferences by household age,
income, make-up and geographic location;
• Review and develop the need indicators specific to housing typically referred to
as independent and assisted living; and,
• Final Study will be used by a Policy Advisory Group that will make policy
recommendations for best practices to address housing needs and
preferences for New Hampshire’s changing population.
New Hampshire Home Prices are Again Showing Signs of Appreciation
19% Decline
$200,000
8%
+
How does New Hampshire Compare with other New England States ?
FHFA House Price Index for New England States
(Seasonally Adjusted, Purchase-Only Index) Q1-1991=100
State
Quarter 3 Quarter 3 Percent National
2013
2012 Change
Rank
Maine
New Hampshire
Vermont
Massachusetts
Connecticut
Rhode Island
208.4
200.3
215.1
229.5
169.6
188.3
199.1
189.0
209.4
216.1
165.8
176.6
4.68%
5.94%
2.73%
6.23%
2.30%
6.62%
New England
U.S.
205.0
203.0
195.5
187.2
4.88%
8.44%
33
24
46
23
48
20
Recent Recent Peak to Peak to Trough to
Peak Trough Trough Current Current
222.2
238.3
218.8
254.0
199.5
240.1
199.1
189.0
203.0
212.3
162.9
176.5
-10.4%
-20.7%
-7.2%
-16.4%
-18.4%
-26.5%
-6.2%
-16.0%
-1.7%
-9.6%
-15.0%
-21.6%
4.7%
5.9%
6.0%
8.1%
4.1%
6.7%
229.8
225.2
193.7
179.2
-15.7%
-20.4%
-10.8%
-9.8%
5.8%
13.3%
Statewide – Sales are
improving slowly. Total sales for
2013 increased by 11.5%
above sales in 2012.
Dec.– $210,000
Dec. – 1,246
The December 2013 median
price of $210,000 is 10.6%
above the median in December
of 2012. Prices are showing
consistent signs of measurable
appreciation.
The statistics used in this analysis are based on information from NNEREN for the period January 2003 through December 2013, for all towns in the State of
New Hampshire. All analysis and commentary related to the statistics is that of NHHFA and not that of NNEREN. This analysis excludes land, interval ownership,
seasonal camps/cottages, multi-family property, mobile/manufactured homes and commercial/industrial property.
Fifteen of the past eighteen months have shown price increases when
compared to the same month in the prior year, while all of the preceding 18
months recorded declines.
Six months is the traditional measure of supply in a balanced market.
At 9 months the December 2013 inventory is similar to last year and near its
seasonal low point for the year, but still reflects a significant improvement over
the prior five plus years.
The statistics used in this analysis are based on information from NNEREN for the period January 2003 through December 2013, for all towns in the State of
New Hampshire. All analysis and commentary related to the statistics is that of NHHFA and not that of NNEREN. This analysis excludes land, interval ownership,
seasonal camps/cottages, multi-family property, mobile/manufactured homes and commercial/industrial property.
Hillsborough County – As
inventory declines, median
prices improve.
Dec.– $214,900
The statistics used in this analysis are based on information from NNEREN for the period January 2003 through December 2013, for all towns in the State of
New Hampshire. All analysis and commentary related to the statistics is that of NHHFA and not that of NNEREN. This analysis excludes land, interval ownership,
seasonal camps/cottages, multi-family property, mobile/manufactured homes and commercial/industrial property.
August– $257,750
Rockingham County – Inventory
is also declining and the median
price is increasing.
The statistics used in this analysis are based on information from NNEREN for the period January 2003 through December 2013, for all towns in the State of
New Hampshire. All analysis and commentary related to the statistics is that of NHHFA and not that of NNEREN. This analysis excludes land, interval ownership,
seasonal camps/cottages, multi-family property, mobile/manufactured homes and commercial/industrial property.
Coos County – Inventory,
while dropping remains above
20 months, sales volume is low,
and median prices are volatile
(ranging from $77,000 to
$159,000 in the past 12
months).
Cheshire County – The
inventory remains above 10
months, and median sales
prices are volatile but are
beginning to show signs of
appreciation.
The statistics used in this analysis are based on information from NNEREN for the period January 2003 through December 2013, for all towns in the State of
New Hampshire. All analysis and commentary related to the statistics is that of NHHFA and not that of NNEREN. This analysis excludes land, interval ownership,
seasonal camps/cottages, multi-family property, mobile/manufactured homes and commercial/industrial property.
Median Purchase Price in 2013
Less Than $100,000
$100,000 to $150,000
$150,000 to $175,000
$175,000 to $200,000
Coos
$92,500
$200,000 to $225,000
More than $225,000
The median purchase price is
highest in Rockingham County,
and lowest in Coos County.
63 percent of owner occupied
housing units in the state are in
Hillsborough, Rockingham and
Merrimack Counties.
Grafton
$190,000
Carroll
$180,000
Belknap
$169,900
Sullivan
$145,000 Merrimack
$202,500
Hillsborough
Cheshire
$225,000
$162,500
Strafford
$200,000
Rockingham
$267,000
New Home Construction Remains Low
While showing some improvement since the end of the
recession, construction activity remains at about 38% of the
level of a decade ago.
And New Home Sales Account for Only a Small Portion of All Sales
New home sales which accounted for as much as 18% of the
market in 2004 and 2005, accounted for less than 8% of all
sales in 2012 and 2013.
Affordability
Home ownership affordability drivers:
Price, Income and Interest Rate.
3.5x
2.6x
3.2x
2.3x
Affordability
In the home ownership affordability equation, price, income and
mortgage terms are basic. However, each element has some
additional complexity.
• Income is influenced by other assets and debts.
•
Equity in an existing home, savings, or other family assets can increase
affordability.
•
Consumer debt, car loans, student loans and other financial obligations can
diminish affordability.
• Interest rate is just one element of the mortgage credit terms.
•
Credit score and down payment requirements can influence the interest rate and
may make credit unavailable.
•
Mortgage insurance can add to debt and reduce affordability.
• Other factors also influence affordability.
•
Real Estate Taxes, Hazard Insurance, and Utility costs.
•
Location / transportation or proximity to income.
Affordability
For Qualified Buyers it may be a good time to buy.
Since 2009 the monthly PITI for the median priced home has been very close to
the median gross rental cost for a three-bedroom unit. However, when the
costs of utilities and maintenance are included in ownership, there remains an
additional $400 to $500 monthly cost for ownership.
The 194 foreclosure deeds recorded in December of this
year is a decrease of 35% from foreclosures recorded in
December of 2012.
The cumulative total of foreclosure deeds in 2013 was 26% below the
total in 2012, and lower than the total in any year since 2007.
December 2013 foreclosure notices decreased by 24%
when compared with December of 2012 and cumulatively a
decline of 36% in activity for all of 2013 when compared with
2012.
For New Hampshire, New England, and the US this 3rd quarter
delinquency rate decline breaks the typical pattern of 3rd quarter
increases for only the second time in recent years. However, this rate
remains stubbornly high.
New Hampshire’s delinquency rate compares favorably with most
other New England states.
At the current pace of foreclosure deed recordings, it could take
nearly 12 months to clear this inventory, without any new
foreclosure initiations.
• Homeownership market is recovering slowly as inventories
decrease and the economy continues to improve.
• On average the housing market in the southern part of the
state is stronger than other parts of the state.
• Foreclosures are down as the economy and housing market
improve.
• Lenders appear more willing to negotiate short sales.
• Delinquencies continue to decline but are still historically
high.
• Foreclosures will continue to moderate purchase price
increases and add pressure to the rental market.
Source: Real Data Corp.
The number of purchase mortgages in 2013 increased over the prior two
years due to improving market conditions and a release of some pent-up
demand. With slowly rising interest rates, refinance mortgages have been
declining since the 2nd quarter of 2013.
As a percent of total mortgages, refinance mortgages have now dipped 50%.
Essentially equal to the number of purchase mortgages.
The November FHA Insured loan data for New Hampshire suggests that the decline in
refinance is continuing.
What does the mortgage market in New Hampshire look like in the
future?
Assuming a stable/growing economy
Short term
• Purchase mortgage activity continues to grow especially in the southern tier of the
state.
• There continues to be some pent-up demand, and cross border activity has
returned. But, the inventory of good quality homes is already limited, especially in
the most desirable locations.
• Refinance activity is negatively influenced by changes in mortgage interest rates.
• Mortgage interest rates are at a 40+ year low, but are unlikely to remain there
much longer.
• On a $200,000 mortgage, a raise of 1% in interest rate means an increase of
about $100 in payment.
Mid term
• Continued growth in purchase mortgage activity will require much stronger job growth
in New Hampshire and a return of the single family home construction.
• Refinance activity will continue to decline as interest rates climb toward +/- 6%.
Long term
• Demographics (the aging of the baby boom generation) and economic growth will play
a big part in what happens, and there are still a lot of unanswered questions.
New Hampshire Housing
2nd Annual Conference on Homeownership
Dan Smith
Director of Housing Research
603.310.9251 direct
[email protected]
www.nhhfa.org
www.GoNewHampshireHousing.com
www.HomeHelpNH.com