New Hampshire’s housing market saw dramatic shifts between 2018 and 2023. Families earning under $250,000 per year—primarily middle-income, budget-conscious households—faced a rapidly changing landscape marked by record-high home prices and historically low inventory.
Moderate-income households navigated this challenging period by purchasing owner-occupied homes, whether transitioning from renting or upgrading from a previously owned home. Their choices spanned a range of home types, including single-family houses, condominiums, and manufactured homes.
From 2018 to 2023, New Hampshire’s housing market became extremely competitive for buyers. Home prices rose steadily at first, then sharply. In 2018, the median home purchase price was around $259,000, but by 2022 it had jumped to about $350,000. By 2023, the median price for a single-family home had soared to roughly $470,000 – the highest ever recorded in the state.
One major reason for the price surge was limited inventory. At the end of 2021, there were only about 1,083 single-family homes listed for sale statewide – 70% fewer homes on the market than just two years earlier. For context, in December 2017 there were around five times as many homes available. By late 2023, the state had only about 1.4 months of housing supply, far below the 6–7 months considered a balanced market.
Strong demand also drove the market. New Hampshire saw an influx of new residents, with about 111,000 people moving into the state during 2021 and 2022, while 93,000 left, for a net gain of 18,300 new residents. Many newcomers (around 44%) were from Massachusetts, often moving to New Hampshire for more affordable housing or lifestyle reasons.
Rising Prices and Affordability Challenges
Home prices in New Hampshire saw record-breaking growth from 2018 to 2023. Prior to 2019, New Hampshire had never seen even a single month with a median home price above $300,000. But in 2021, six different months had a median price over $400,000. The annual median price in 2021 was $395,000, an 18% jump from 2020. This rapid increase continued, with the median price for 2022 at about $440,000 – 11.4% higher than 2021. By 2023, the median single-family price hit approximately $470,000.
These price increases far outpaced household income growth. By 2024, a family earning the median income would need to spend nearly 49% of its monthly income to afford payments on a median-priced house. Housing is generally considered affordable when it consumes 30% or less of income.
The Affordability Crisis
The New Hampshire Association of Realtors’ housing affordability index reflects this strain. In 2021, affordability had already dropped to its lowest point in 14–15 years. By 2022, the statewide affordability index for single-family homes averaged only 70 (with 100 meaning a median-income family can exactly afford a median-priced home) – about 32% less affordable than in 2021. In 2023, the affordability index fell even further, reaching an all-time low of 65 for the year.
One consequence was a decline in first-time homebuyers. Nationally, the share of first-time homebuyers fell to just 26% in 2022, the lowest level in decades. The homebuyer mix shifted toward repeat buyers (people selling one home to buy another) and away from first-timers. Repeat buyers often have more cash from home equity and higher incomes, giving them an edge in bidding wars.
To cope, many budget-conscious buyers adjusted their expectations, considering smaller homes, fixer-uppers, or homes further from their ideal location. Others turned to more affordable housing types, such as condominiums or manufactured homes.
Changing Household Needs and Moves
Despite market pressures, households continued making moves based on life stages and needs. During 2018–2023, some families upsized into larger homes, while others downsized to smaller ones.
Upsizing Trends
Younger buyers and growing families often upsized during this period – if they could manage to buy at all. Many millennials and Gen X families moved from rentals or starter homes into larger single-family houses to accommodate children, home offices, or simply more space. National data supports this pattern: homebuyers 57 years old and younger were more likely to purchase a bigger home when they moved.
However, the competitive market forced creative decisions. With limited inventory, some families upsizing had to compromise on location or features. A family in southern New Hampshire seeking a larger home might find prices in their town too steep, so they’d move to a more rural town where their budget stretched further. Others extended their search radius or considered older homes that needed work. Not everyone who wanted to move to a bigger home could successfully do so, leading some to delay upsizing.
Downsizing Patterns
Many older homeowners or “empty nesters” chose to downsize. Baby Boomers became a significant portion of sellers and buyers during this period. After their children moved out or upon retiring, they often no longer needed a large house. Many sold their high-maintenance family homes and bought something smaller, such as a condo or a single-level house.
Nationally, buyers over 57 years old were likely to downsize to a smaller home when they moved. In New Hampshire, this might look like a couple in their 60s selling a four-bedroom suburban home and relocating to a two-bedroom condo in a town center or a cottage by a lake. Downsizing could also free up equity – in a hot market, older sellers could cash out significant money from their long-time homes.
Downsizers faced challenges too. The shortage of homes wasn’t only in the large-home segment; smaller homes and condos were also scarce. An older homeowner wanting to downsize might sell quickly but then have difficulty finding an affordable smaller home. Some competed with first-time buyers for the same limited condos or single-story houses. Others chose to rent after selling, hoping to buy a downsized home when the market cooled.
Every time an older couple downsized and sold their house, that house became an opportunity for a younger family looking to upsize. The large, high-priced homes sold by downsizing Boomers often went to dual-income families in their 30s or 40s who were stretching their budgets to move up.
Shifts in Home Type Preferences
Single-Family Homes
Single-family homes had the highest demand and saw the largest price increases. From 2018 to 2021 alone, the median value of owner-occupied single-family homes in New Hampshire rose about 36%. By the end of 2021, the median single-family sale price was around $400,000, and in 2022 it peaked at about $460,000 in the spring.
These prices put many single-family houses out of reach for budget-conscious families. Still, most moderate-income buyers tried to get a house if possible, due to the space, privacy, and often better long-term value. Those who could afford it went for single-family homes, while others turned to alternatives.
Condominiums and Townhouses
Condos and townhouses became increasingly popular as a “next-best” option for budget-conscious buyers. Condos are often cheaper than detached houses in the same area because they are smaller or share walls. During 2020–2022, some buyers who would have preferred a standalone house chose condos instead because that’s what fit their price range.
In 2021, the median condo price in New Hampshire was about $290,000, much lower than the single-family median. However, by 2022 the median condo price jumped to $345,000 (up 19% from 2021). By late 2023, the median condo price was around $400,000 – not far off from some smaller single-family homes.
The supply of condos was also limited – the number for sale dropped sharply, over 40%, between 2020 and 2021. So condos went from being an “affordable alternative” to hot commodities themselves. More moderate-income buyers purchased condos than before, simply because the single-family market was so competitive.
Manufactured Homes
Manufactured homes also played a role, particularly for lower-income households. These factory-built homes are typically much less expensive than site-built houses, offering an attainable option for homeownership. About 20% of New Hampshire owner households with incomes below $35,000 live in manufactured homes, and around 10% of those with incomes $35k–$50k do as well.
During 2018–2023, with house prices soaring, interest in manufactured homes likely grew. A family that could not compete in the $300k+ housing market might purchase a manufactured home for under $150k (plus lot rent in a park).
Manufactured homes saw price increases too, though not as steep as site-built homes. Some efforts were made to help residents buy and cooperatively own the land under their mobile home communities to keep them affordable.
The Vacation Home Boom
A striking trend during this period was the boom in vacation home purchases around 2020–2021. Remote work and pandemic-related lifestyle changes led many families to seek second homes in scenic areas. New Hampshire, with its beautiful lakes, mountains, and rural getaways, became a prime target.
By early 2021, the number of buyers securing mortgages for second homes was 87% higher than pre-pandemic levels. This surge continued into early 2022. Low mortgage rates and the ability to work from anywhere made owning a getaway more feasible.
For budget-conscious local buyers, this added competition. Homes that might have been moderate-cost primary residences sometimes got purchased as vacation homes by wealthier buyers. In 2018, the median purchase price for out-of-state buyers was almost $30,000 higher than for New Hampshire resident buyers. By the peak in 2021, out-of-state buyers had a median purchase around $380,000+, higher than the median for local buyers.
Certain counties felt this trend strongly. Areas with recreation and vacation appeal – for instance, Carroll County (Conway and Wolfeboro), Belknap County (Lakes Region), and Grafton County (White Mountains) – saw a significant portion of sales to second-home buyers. Additionally, short-term rentals became popular in tourist spots, further encouraging investment purchases. By 2022, there were about 5,582 short-term rentals active across New Hampshire, heavily concentrated in vacation counties.
By late 2022 and 2023, the vacation home frenzy cooled off as mortgage rates rose and the federal government added extra fees on second-home mortgages. However, the legacy remained: many houses had already transitioned to seasonal use, with fewer homes available for permanent residents.
Mortgage Rates and Lending Conditions
The trajectory of mortgage interest rates from 2018 to 2023 profoundly impacted homebuying. In 2018, the average 30-year fixed mortgage rate was about 4.54%. As 2019 arrived, rates fell to about 3.94%, giving buyers more breathing room.
The Pandemic Rate Drop
The real game-changer came in 2020 and 2021. In response to the COVID-19 pandemic, the Federal Reserve slashed interest rates, leading to record-low mortgage rates. By July 2020, 30-year rates fell below 3% for the first time ever, and in January 2021 they hit an all-time low of about 2.65%. Throughout 2021, the average 30-year rate was roughly 2.96%, the lowest annual average on record.
These ultra-low rates significantly boosted home affordability (in terms of monthly payments) and fueled a surge in buying activity. At a 3% interest rate, a family could afford a much higher loan amount for the same monthly payment than at 5%. Many buyers rushed to take advantage, knowing this was a rare opportunity.
However, low rates combined with limited inventory also enabled buyers to bid higher prices while keeping payments manageable. This contributed to bidding wars and rapid price escalation in 2020–2021.
The 2022 Rate Shock
In 2022, the winds shifted dramatically. Inflation surged, and the Federal Reserve responded by hiking interest rates rapidly. Mortgage rates jumped from about 3.22% in January 2022 to over 7.0% by October 2022, the highest in two decades.
To put this in perspective: at 3% interest, a $300,000 loan has a principal and interest payment of roughly $1,265 per month. At 6.5% interest, that same loan’s payment jumps to about $1,896 per month (over $600 more). This swing priced many buyers out. Home sales volume in NH dropped in the second half of 2022 – there were about 14,360 homes sold in 2022, down from over 18,000 in 2020.
By 2023, mortgage rates fluctuated in the mid-6% range, slightly down from late 2022 peaks. Some buyers turned to adjustable-rate mortgages or interest rate buydowns to ease initial costs.
Regional Differences Across New Hampshire
New Hampshire’s housing trends varied significantly by region. The southern tier and suburban counties saw the most intense competition and highest prices, while northern and rural areas remained more affordable but had other trade-offs.
Southern Counties and the Seacoast
The southern counties (especially Rockingham and Hillsborough) experienced the highest home prices. Rockingham County, which includes Portsmouth, Salem, and Exeter, consistently ranked as the most expensive. By late 2023, Rockingham’s median single-family home price was about $625,000, up from $600,000 a year earlier. Nearby Hillsborough County (Manchester and Nashua) also had a high median price around $500,000.
The Seacoast region (eastern Rockingham and parts of Strafford County) was particularly expensive. Towns like Portsmouth, Hampton, and Rye saw very high prices and often cash buyers. Budget-conscious buyers rarely could buy in prime Seacoast towns unless they found a small condo or a fixer-upper.
Central and Western Regions
Central and western counties, such as Merrimack (around Concord), Strafford (around Dover/Rochester), Cheshire (Keene area), and Sullivan (Claremont area, Upper Valley), had moderate pricing. These areas offered something of a middle ground: not cheap, but more attainable than the south. In 2024, Merrimack County’s median price was around $420,000 and Cheshire around similar or slightly less.
Communities in these areas that were historically affordable saw significant appreciation. Small cities like Claremont or Franklin witnessed more buyers coming in because of their relative affordability, driving their prices upward too.
Lakes Region and White Mountains
The Lakes Region and White Mountains (Belknap, Carroll, and Grafton counties) had a split dynamic. They are somewhat rural, which usually means cheaper real estate, but they are also tourism hubs, which drove up certain segments of their market. In Belknap County (around Laconia and Lake Winnipesaukee), the median price climbed into the mid-$400,000s by 2023. Carroll County (Conway and Wolfeboro) saw medians in the $500,000 range by late 2023, surprisingly high given its small population.
For local year-round residents, finding an affordable home could be tough due to competition with second-home buyers. However, more remote parts of these counties and less touristy towns still offered comparatively lower prices.
The North Country
The North Country (Coos County) remained the most affordable region. In 2024, its median single-family home price was around $255,000, by far the lowest in the state (less than half the Rockingham median). For a household under $250k income, Coos was financially accessible – many homes under $200k could be found, especially older homes in towns like Berlin or Colebrook.
The challenge there is not high prices, but limited economic opportunities. Not many people were moving into the North Country for jobs during 2018–2023; some communities continued to see population decline.
Comparing 2018–2023 to 2008–2017
The 2018–2023 period contrasts sharply with 2008–2017, which included the housing crash and slow recovery.
Price Trajectories
From 2008 to 2017, New Hampshire home prices were recovering from the Great Recession. Prices reached a bottom around 2011–2012 (after dropping roughly 30% from their mid-2000s peak), then gradually climbed back. By 2017, the median price was back near the mid-2000s peak – about $266,000. In short, 2008–2017 saw prices fall and then slowly climb back to normal.
In contrast, 2018–2023 saw prices surge to entirely new heights, far beyond previous records. The growth in the late 2010s was already strong, and the early 2020s brought unprecedented spikes.
Housing Inventory
Around 2008–2012, New Hampshire had an excess of housing inventory due to foreclosures and low buyer demand. Months of supply in 2009 was extremely high – at one point around 18 months. This oversupply put buyers in the driver’s seat.
By 2016–2017, the market had tightened considerably, with inventory falling to around 3–6 months of supply. But even that was more than what we saw in 2018–2023, when inventory dropped to under 2 months statewide, and at times near 1 month. So, 2008–2017 began as a buyer’s market and ended balanced to slightly tight; in contrast, 2018–2023 was an extreme seller’s market almost the entire time.
Mortgage Rates
In 2008, mortgage rates were about 6%. Then the Great Recession and Federal Reserve cuts brought them down. By 2012–2013, rates hit record lows for that era – roughly 3.5%. They generally stayed historically low (3–4%) through 2015–2017.
The 2018–2023 period had even lower rates at one point (2020–21’s all-time lows), but then an extremely rapid rise. No one in 2008–2017 experienced a doubling of mortgage rates in one year like in 2022. The earlier decade offered a relatively stable or improving financing environment, while the later period brought whiplash – first an almost unbelievable chance to borrow cheaply, then a sudden clampdown of expensive loans.
Market Dynamics
The prior decade saw less investor activity and virtually no bidding wars beyond localized hot markets. In contrast, 2018–2023 saw active investors and ordinary buyers often bidding above listing price. The notion of paying tens of thousands over asking, or waiving inspections, was not common in 2008–2017 but became routine in 2020–2022.
In conclusion, the 2018–2023 period was almost the mirror opposite of 2008–2017 for New Hampshire homebuyers on a budget. The earlier years were marked by low demand, falling or recovering prices, plentiful choices, and gradually improving credit conditions. The recent years, however, were characterized by high demand, soaring prices, scarce supply, and wild swings in interest rates – a far more challenging environment for average families.
References
- Record high prices, low affordability marked New Hampshire 2023 home sales – Manchester Ink Link
- 2021 Market Report – New Hampshire REALTORS
- New Hampshire homes became even less affordable through 2022 – NH Business Review
- Supply and demand: NH is No. 1 for pace of home sales and price increases – NH Business Review
- What is the homeownership rate in the United States? – USAFacts
- Housing in New Hampshire: Shortage Raises Costs – New Hampshire Fiscal Policy Institute
- Eleven Takeaways From the 2022 Profile of Home Buyers and Sellers – National Association of REALTORS
- Home Buyers and Sellers Generational Trends Report – National Association of REALTORS
- Vacation-Home Boom Continues Into 2022, With Demand Up Nearly 90% From Pre-Pandemic Levels – Redfin
- Soaring Mortgage Rates in U.S. Dent Demand for Vacation Homes – Bloomberg
- U.S. States Investing Most in Manufactured Housing – Construction Coverage
- Mortgage Rate History | Chart & Trends Over Time – The Mortgage Reports
