Maine’s housing market experienced dramatic shifts between 2018 and 2023, affecting most households earning under $250,000. After a period of steady growth in the mid-2010s, home prices accelerated rapidly during the COVID-19 pandemic and its aftermath. The statewide median single-family home price rose from about $215,000 in 2018 to roughly $360,000 by 2023—a 67%+ price increase that far outpaced income growth.

From 2020 through 2023 alone, Maine’s median home price jumped 43.5%, faster than the national average of 39.1%. By 2024, Maine had seen the largest five-year home price increase of any state—78.5% since 2019—underscoring how extraordinary this period was for housing costs in the Pine Tree State.

Sales activity also swung widely. In 2018–2019, Maine had around 17,000–18,000 home sales annually, reflecting a healthy market. During 2020 and 2021, ultra-low mortgage rates and pandemic-driven demand pushed sales to record highs (over 20,000 homes sold in 2021). This pandemic home-buying frenzy was fueled by urban buyers relocating to Maine for more space, Mainers seeking larger homes for telework, and historically low interest rates around 3%.

By 2022 and 2023, conditions shifted dramatically. Rapidly rising interest rates (over 6% by late 2022) and high prices caused a sharp cooldown in sales. Total home sales in 2022 fell about 16% from 2021, and 2023 saw further declines—sales volumes that year were the lowest since 2014.

Buyers began to pull back due to affordability challenges, and many would-be sellers stayed put, unwilling to trade in low-rate mortgages for new loans at 7%+. By late 2023, Maine’s for-sale inventory inched up from record lows as the market eased slightly.

In short, 2018–2023 saw Maine transition from a relatively affordable market into a red-hot seller’s market with skyrocketing prices and intense competition, followed by a late-period cooling. Households under $250k in income—essentially Maine’s middle class—faced both unprecedented opportunities (such as 3% mortgage rates in 2020–21) and growing barriers (soaring prices and 7% rates by 2023).

Property Types Budget-Conscious Buyers Are Choosing

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For cost-conscious Maine homebuyers (income <$250k), the type of property purchased often comes down to balancing needs vs. budget.

Single-Family Homes

Traditional detached houses remain the primary choice for most buyers, but high prices have spurred interest in alternatives. The statewide median price for single-family homes climbed from $225,000 in 2019 to about $335,000 in 2022, putting many houses out of reach for first-time buyers on moderate incomes.

Buyers under the $250k income level often sought smaller or older homes that needed work, or looked in less expensive towns. By 2023, a move-in-ready home in central Maine that might have cost $160,000 in 2019 was no longer attainable—that budget would likely only cover a mobile home on an acre of land.

Condominiums and Townhomes

Maine’s condo market is relatively small (only ~6% of newly built homes since 2010 have been condos statewide), but condos gained popularity with certain budget-conscious buyers. In urban areas like Portland and some coastal communities, condos provided a slightly lower-price entry point and lower maintenance lifestyle.

However, even condo prices rose significantly. In Portland, demand remained strong with a 13% increase in price per square foot for existing condos in 2021. By 2023, a $250,000 budget in southern Maine might only buy a small condo (~650 sq ft). Condos appealed especially to downsizers and some first-time buyers willing to trade space for location or affordability.

Manufactured & Mobile Homes

Maine has one of the highest rates of mobile home ownership in the Northeast—about 8% of Maine’s housing units are mobile homes. During 2018–2023, manufactured homes became an increasingly popular affordable option for those “edged out” of the site-built home market.

In fact, mobile home sales were a rare growth segment in 2022: 640 mobile homes sold from January to July 2022, up 13% from the same period in 2021, even as overall home sales fell that year. The median price of those mobile homes was around $130,500 (far below the median single-family price).

Buyers turning to manufactured housing included younger families escaping steep rent increases, first-time buyers without a large down payment, and some retirees downsizing to lower-cost, one-level living. Industry sources noted that Maine mobile home dealers “sold out” of inventory in 2022 due to high demand.

Multi-Family Properties

A subset of budget-conscious buyers—particularly first-time buyers with an eye on long-term investment—purchased small multi-family properties to offset costs. MaineHousing and FHA loans allow owner-occupants to buy 2–4 unit homes with low down payments, enabling the owner to live in one unit and rent out the others.

This “house hacking” strategy grew in appeal as rents climbed. A first-time buyer with under $250k income could leverage rental income to qualify for a bit more house. In Maine’s tighter housing markets (like Portland or Lewiston), such duplexes and triplexes were in high demand, although inventory was limited and prices rose alongside the overall market.

Market Dynamics: Upsizing vs. Downsizing

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Changes in housing needs and life stages played out differently before and after the pandemic housing boom.

Upsizing Trends

Many Maine households used the favorable conditions of 2018–2021 to trade up to larger homes. In the late 2010s, with relatively stable prices and low mortgage rates ~4%, growing families could reasonably “move up” from a starter home to a bigger house.

This trend accelerated in 2020–2021 when mortgage rates plunged under 3%. Young families and professionals suddenly found that lower interest rates expanded their buying power. As a result, many buyers upsized to homes with extra bedrooms or bigger yards, seeking more space for remote work, remote schooling, or simply a better quality of life during the pandemic.

First-time move-up buyers in this period often skipped the traditional “starter home” and went straight to purchasing larger homes, capitalizing on cheap financing.

However, by 2022–2023, upsizing became much more difficult. Rapid price increases meant that the next tier of homes moved further out of reach. The spike in mortgage rates (from ~3% to ~7% in a year) imposed a financial penalty on moving up. A household that bought a home in 2018–2021 likely had a fixed interest rate under 4%; to sell and buy a bigger home at 7% could double their interest cost.

This led to what analysts call the “lock-in effect.” Many homeowners refrained from selling their homes in 2022–2023 because they enjoyed much lower mortgage rates on their current homes.

Downsizing Patterns

Maine’s large population of baby boomers and retirees has long contributed to downsizing trends. Between 2018 and 2023, downsizing continued but was also influenced by market conditions.

Early in this period, older homeowners looking to reduce expenses or maintenance would sell larger homes (often to upsizers) and seek smaller houses, condos, or 55+ community units. Maine’s average household size is only 2.23 persons (the second-lowest in the nation), partly due to a high proportion of seniors, creating consistent demand for smaller, easier-to-maintain homes.

During the pandemic boom, home values surged over 20% in 2021 alone, tempting longtime owners to sell and reap gains. But downsizers then faced the challenge of finding an affordable smaller home. Some empty-nesters chose to stay put longer, unwilling to join frenzied bidding wars for condos or one-story homes (which were also in demand by first-time buyers).

Others got creative: a number of Maine retirees turned to manufactured housing as a downsizing option, attracted by the lower price and single-floor living.

By 2022–2023, downsizing was also constrained by the interest rate environment. A retiree with a paid-off house could sell and pay cash for a smaller condo, but for those who still carried a low-rate mortgage on their bigger home, taking out a new mortgage at high rates on a downsized home didn’t make financial sense.

Regional Patterns and Migration

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In-migration to Maine

After 2018, and particularly in 2020–2021, Maine experienced a significant wave of net in-migration. The state became a migration destination for people seeking safety, space, and a lower cost of living than big cities.

From 2020 to 2021 alone, net in-migration nearly doubled to an average of 16,100 people per year. Many newcomers hailed from more expensive markets (Boston, New York, etc.) or took advantage of remote work to move to Maine.

Southern Maine, with its proximity to Boston and Portland’s amenities, saw the fastest population growth. This influx of new residents added housing demand pressure, particularly on starter homes and mid-range properties.

Relocations Within Maine

At the same time, some Maine residents relocated from pricier regions to more affordable ones. For instance, a family priced out of the Portland area might move to central Maine (Augusta/Waterville) or eastern counties where home prices were lower.

Prior to 2020, real estate agents often had to persuade buyers to consider inland or northern areas; during the pandemic, buyers on a budget increasingly sought out those areas as one of the few ways to land a home. By late 2022, central Maine homes had been discovered by bargain hunters, shrinking the affordability gap between regions.

Vacation Home Market Impact

Maine has long been a vacation home haven—from coastal cottages to lakefront cabins. 2018–2023 saw a boom in second-home purchases, which impacted the market for locals.

Coastal and resort regions (like York and Cumberland counties in the south, and Knox, Hancock, Lincoln on the mid-coast) saw especially strong second-home activity. York County saw a 16% jump in second-home sales in 2023, and Cumberland 14%, often at very high price points.

While luxury second-home buyers are mostly above the $250k income bracket, their activity had trickle-down effects: they helped drive up overall home values and reduce inventory, particularly in desirable coastal towns. This made it harder for year-round residents to buy there.

Regional Market Differences

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Southern Maine (Greater Portland, Seacoast)

Southern Maine is the state’s economic hub and has experienced the most intense market conditions. The two southernmost counties, Cumberland (home to Portland) and York, reached average home sale prices of $610,000 and $556,400 respectively by late 2023—up roughly 10–11% from the prior year, despite the market cooling.

For middle-income buyers, Southern Maine was challenging. A $250,000 budget might only buy a very small condo or fixer-upper in this region. Starter homes often fetched $350k or more.

Many local buyers expanded their search radius or considered condos/mobile homes due to the scarcity of affordable single-families. The competitiveness is illustrated by data from Cumberland County: even in 2024, roughly 40% of homes and condos were selling above asking price (often due to multiple offers), though about 23% of listings had to cut price—a tug-of-war between high demand and affordability limits.

Northern and Interior Maine

Northern Maine (including areas like Aroostook County, northern Penobscot, Piscataquis) and the interior counties have historically had much lower prices and slower markets. They remained the relative bargain in this timeframe.

For example, Aroostook County’s average home price in late 2023 was only about $174,900, the lowest in the state. Other interior counties (Somerset, Piscataquis) also stayed well under $250k median prices. These areas are rural, with population declines or minimal growth, which kept demand softer.

However, they did not escape the trend of price appreciation. Remote work allowed some migration into these areas, and local buyers found themselves competing with out-of-area investors at times.

The homeownership rate in the northern region is slightly higher (around 71.5%) than in the south, reflecting the historically lower barriers to ownership. But homeownership in both regions has ticked down since 2010 as young people struggle to buy.

Central Maine and Small Cities

Regions like Central Maine (Augusta/Waterville in Kennebec County) and the Bangor area (Penobscot County) straddle the north-south divide. They saw some of the largest percentage increases in sales and prices during 2020–2022 as buyers sought affordability.

Kennebec County became a hotspot for new home construction. Through 2023, an average Maine household could still find homes closer to their budget in places like Bangor or Lewiston versus the coast. That said, local incomes in these areas are also lower, so affordability challenges emerged nonetheless.

Financial Factors and Affordability

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The Mortgage Rate Rollercoaster

In 2018, 30-year fixed mortgage rates averaged around 4.5%, then fell to the low 3% range by 2020. In 2021, rates hit historic lows (below 3% at times), which dramatically reduced borrowing costs.

This low-rate environment allowed many in the under-$250k income bracket to afford homes that might have been just out of reach. Middle-income buyers who locked in 30-year loans at 2.8% in 2021 secured homeownership with payments often lower than local rents for comparable homes.

However, rates turned sharply in 2022. By late 2022, average 30-year rates were in the mid-6% range, more than double a year earlier. In November 2023, rates in Maine peaked around 7.8%, the highest in over 20 years.

This spike was game-changing for affordability. A home that cost $300,000 with a 3% loan suddenly felt as costly as a $450,000 home might have been at 3% when rates hit 7%. Many buyers had to lower their price targets or pause their search.

Affordability Crisis

The collision of high prices and high rates caused Maine’s affordability index to plummet. MaineHousing’s Affordability Index (ratio of income to the income needed for median home) dropped from around 1.0 (meaning median income could afford median home) in 2018–2019 to just 0.55 by 2023.

The median income in Maine was about $70,652 in 2023, and the income needed to afford the median house was about $128,390—a huge gap. Over 79% of Maine households could not afford the median home by 2023, whereas five years earlier that share was much lower.

By 2022, it was reported that one needs a six-figure income to afford the median home in Maine, a stark milestone for a state with a traditionally moderate income profile.

First-Time Homebuyer Resources

To help bridge the gap, many Maine buyers under the $250k income threshold turned to special financing programs. MaineHousing’s First Home Loan program offers low fixed-rate mortgages (often below-market interest rates) plus down payment assistance for eligible first-time buyers.

During 2022, MaineHousing was able to keep its First Home Loan interest rate nearly 1% below market averages. The agency also increased its down payment assistance grant from $3,500 to $5,000 in 2022 to help buyers who had the income to support a mortgage but struggled with upfront cash.

These programs were in high demand—MaineHousing purchased a record $177.7 million in loans in 2022, supporting 918 loans (up from 725 in 2021). Banks and credit unions in Maine also offered other assistance, like FHA, VA, and USDA Rural Development loans requiring low down payments.

One challenge in 2020–2021 was that competitive market conditions made financed offers less attractive. Buyers relying on down payment assistance or government loans sometimes lost out to cash buyers or conventional loans with bigger down payments.

Rental Market Pressures

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Rising Rents and Tight Supply

Maine, like much of the nation, saw significant rent increases in the late 2010s and especially during 2020–2022. By the end of 2022, the average rent for a 2-bedroom unit in the Portland area was about $1,859, up sharply from around $1,300 in 2017. Even smaller markets saw rent hikes—Bangor’s 2-bedroom rent averaged $1,166 in 2022, up from ~$940 in 2018.

These increases meant that renting took a bigger bite out of income. By 2023, more than half of renter households earning $35,000–$49,999 were paying over 30% of income on rent (53.2% were cost-burdened), up from just 32.8% in 2018. Even in the $50,000–$74,999 bracket, 28.8% of renters were cost-burdened by 2023—more than double the share five years earlier.

Part of the issue was low rental vacancy and limited inventory. The overall rental vacancy rate in Maine was around 6.7% in 2020, which dropped to about 5.4% in 2022 for apartments (an extremely low rate). This implied that apartments were being snapped up quickly, and landlords had the upper hand to raise rents.

Buy vs. Rent Decision

For renting households with decent incomes (say $50k–$100k) and stable employment, these conditions made buying a home appealing despite high prices. Many renters saw their monthly rent balloon to $1,500 or $2,000—at 2021 interest rates, that could service a mortgage for a $300k+ home.

In 2020–2021 especially, record-low rates meant buying was often cheaper than renting on a monthly basis. This incentivized first-time buyers to stretch to purchase if they could secure the down payment.

Additionally, rental instability—like sudden large rent hikes or a landlord deciding to sell the property—made the security of owning attractive. The pandemic underlined the value of “home” as a safe haven.

On the other hand, not everyone could make the leap. The same high home prices and limited inventory that frustrated buyers kept some renters renting by necessity. Especially in 2022–2023, with interest rates high, the upfront cost to buy and the difficulty finding a suitable home kept a portion of renters on the sidelines.

Demographic Shifts Among Homebuyers

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Age of Buyers

The age distribution of homebuyers shifted upward during this period. Nationally, the median age of first-time buyers jumped to 36 in 2022, and Maine likely mirrored that trend given its older demographics.

Many younger Mainers (20s and early 30s) delayed homeownership, either by circumstance or choice. Those who did buy in their 20s often had help (e.g., family assistance) or bought in lower-cost rural areas.

The typical buyer in Maine by 2022 was often in their 30s or 40s for first-timers, and 50s to 60s for repeat buyers. Indeed, the median age of all U.S. homebuyers in 2022 hit 53—reflecting lots of repeat buyers and fewer young buyers.

First-Time vs. Repeat Buyers

Middle-income homebuyers in Maine included both first-timers and repeat buyers. First-time buyers faced more challenges, as evidenced by their shrinking market share (only ~26% of buyers nationally in 2022 were first-timers).

In Maine, first-timers often utilized programs like MaineHousing loans and were heavily impacted by student loan debts and lower savings. The profile skewed toward dual-income couples (it was very hard for a single income under $70k to buy without assistance by 2023).

Repeat buyers (those selling one home and buying another) usually had equity to carry forward, which during 2020–2022 could be substantial given the price appreciation. A family who bought 5-10 years earlier likely saw their home value jump, giving them a larger down payment for the next house.

Comparison with 2008–2017 Housing Trends

To put 2018–2023 in context, it’s helpful to compare it with the previous decade. The differences are striking—Maine’s housing market in the late 2000s and early 2010s was almost the inverse of the late 2010s/early 2020s in many ways.

Housing Market Cycle

The 2008–2012 period encompassed the end of the last housing boom and the Great Recession housing bust. Maine did not have as severe a crash as some Sunbelt states, but prices did stagnate and even dip slightly around 2008–2011.

In contrast, 2018–2023 was a boom time: prices skyrocketed and sales hit record highs in 2020–2021 before tightening in 2023. So whereas 2008–2012 was a buyer’s market (or even a non-market if credit was tight), 2018–2021 was predominantly a seller’s market with unprecedented price growth.

Price Trends

Over the 2008–2017 decade, Maine’s home prices grew slowly overall, with most gains occurring after 2013. That ~20% increase over 6 years is modest compared to the ~67% increase from 2018 to 2023.

Affordability in 2015–2017 was relatively good—MaineHousing’s index hovered around 1.0 or slightly above (meaning the median income could comfortably afford the median home). By contrast, 2020–2023 saw some of the fastest price growth in Maine’s history, outpacing income by a large margin.

Market Psychology

The early part of the prior decade, buyers were cautious and banks conservative—the memory of the bust was fresh. There was also less urgency; one could take time to shop, perhaps negotiate price down in 2012.

By the early 2020s, the psychology flipped to fear of missing out on low rates and rising prices. Buying a home became a race against the clock. Maine’s market had never seen the level of frenzy that occurred in 2020–2021.

In sum, 2008–2017 was characterized by recovery and relative affordability, while 2018–2023 was characterized by a boom and declining affordability. For households under $250k income, a decade ago they could reasonably expect to buy a home in their 20s or 30s at maybe 2-3 times their income. In the latest period, many needed to wait longer, combine incomes, or accept paying 4-5+ times their income for a house.

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