Commentary SNAPSHOT...HOUSING MARKET SNAPSHOT Q1 2020 7,603Q2 2019 105,733 INITIAL CLAIMS FILED 0...

HOUSING MARKET SNAPSHOT

Q1 2020 7,603

Q2 2019 105,733

INITIAL CLAIMS FILED

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

New Hampshire Unemployment: Initial Claims Filed

1,291%

3.62%

1.76%

1.55%

0

1

2

3

4

5

6

7

8

9

20

00

20

02

20

04

20

06

20

08

20

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20

16

20

18

20

20

PE

RC

EN

T

Mortgage Interest Rates Fed Funds Rate 10 year Treasury

WH

AT’

S IN

SID

ECommentary p.2

Unemployment Rate (US, NE, NH) p.3

Unemployment Claims Filed in NH

Employment by Type of Business p.4

Interest Rates Mortgage Activity in NH p.5

MLS Listings Months of Supply p.6

MLS Closed Sales MLS Median Sales Price p.7

Building Permits p.8

Where Do NH Homebuyers Come From? p.9

Rents & Vacancies p.10

JUNE/JULY 2020

NEW HAMPSHIRE HOUSING FINANCE AUTHORITY

Report prepared by NHHFA’s Policy, Planning and

Communications Group

P.O. Box 5087 | Manchester, NH 03108 | 603-472-8623

NHHFA.org | [email protected]

New Hampshire Housing | June/Juluy 2020 Housing Market SNAPSHOTNHHFA.org2

THE HOUSING MARKET: UNEXPECTEDLY STEADYDean J. Christon, Executive Director, New Hampshire Housing Finance Authority

It has been about four months since the COVID-19 pandemic hit New Hampshire and our nation. We anticipated various outcomes, yet we are experiencing the unexpected. The state’s housing market thus far appears to be undeterred by the pandemic. Houses in most areas of the state continue to sell briskly and at or above their asking price, and those priced under $300,000 are selling in under a month’s time.

In March, Governor Sununu’s Emergency Orders stopped non-payment evictions and foreclosures, expanded unemployment insurance benefits, and prevented utility shut-offs for non-payment. These necessary relief measures, along with federal CARES Act funds, likely have deferred some of the impact that would otherwise have been felt when so many lost their jobs, were furloughed or were laid off.

While the market has remained generally stable, we are concerned that when expanded unemployment benefits come to an end, some owners and renters will experience significant financial stress. This will come at about the same time that the eviction and foreclosure moratoria will end. The potential confluence of these factors – in addition to the ongoing public health crisis – may have a negative impact on the market in the future.

We will continue to monitor trends carefully in an effort to provide policymakers with timely and accurate information. Next month we will publish our annual Residential Rental Cost Survey Report, and in August our Housing Market Report will look more deeply into current data on New Hampshire’s economy, and homeownership and rental markets.

THE DOUBLE DOUBLERuss Thibeault, Economist, Applied Economic Research | AER.com

I never thought I would see the “double-double” in New Hampshire. By that I mean a double-digit unemployment rate (14.5% in May) and double-digit year over year home price appreciation (generally 10%) at the same time. The conven-tional relationship is that when the economy tanks, housing slips and falls. That’s not happening in this virus-struck bizarro world.

What accounts for this? For one thing, we are experiencing record low mortgage rates at or under 2.5%, thanks to Feder-al Reserve stimulus policies. Combine these rates with subdued construction and the thin inventory (only a one month backlog for units under $300,000) and units get scooped up as soon as a posting shows up on realtor.com. Realtors are busy, buyers are buying, and sellers are selling.

The rental market appears to be holding up reasonably well. The combined effects of existing rental subsidies, supple-mental unemployment benefits, an exceptionally low vacancy rate at the start of the year and an interim moratorium on evictions are combining to ward off what would otherwise be challenging times for many renters and landlords.

So, as of now, housing markets have not tanked as might be expected given the unprecedented soft economic conditions.

That said, issues remain. The pain of this downturn is not spread evenly across income and age cohorts. Most of the jobs lost have been in the retail, restaurant, and lodging sectors, consisting primarily of lower wage jobs held by young-er workers. So, many of those who couldn’t find an affordable place to live before the downturn hit, find their housing situation even worse today. As Homer Simpson quipped, “It just gets worser and worser.”

As to the future? Stay tuned. Housing’s short and long term dimensions are elusive.

Source: U.S. Bureau of Labor Statistics (seasonally adjusted)

PRIOR TO THE CORONAVIRUS CRISIS, New Hampshire’s unemployment

rate had had been below 4% for over five years (4% or less is

considered full employment). New Hampshire’s pre-virus

seasonally adjusted unemployment rate as of March 12 was 2.4%.

Unemployment claims due to job loss, layoffs or furlough are about

the same nationally and regionally. In New Hampshire, the rate is more

than 1% higher.

13.3%

13.7%

14.5%

New Hampshire’s seasonally adjusted

unemployment rate for May 2020 was 14.5%

UNEMPLOYMENT RATE (US, New England, New Hampshire)

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

US NE NH

NHHFA.orgNew Hampshire Housing | June/July 2020 Housing Market SNAPSHOT 3

4

Unemployment claims appear to have peaked in early May, and by

the end of the month had dropped to 102,189 in continuing claims. The

state’s total labor force is 768,000.

Initial claims peaked in the week end-ing 4/4/2020; as of the week ending

6/6/2020, initial claims were down 84% from this.

Continued claims peaked in the week ending 5/9/2020; as of the week end-ing 6/6/2020, continued claims were

down 12% from this peak.

The coronavirus had an immediate impact on various kinds of ser-

vice-sector employers, from March until the Governor’s emergency

orders began to allow phased-in re-openings of many businesses in May.

UNEMPLOYMENT CLAIMS FILED Weekly Claims Filed in New Hampshire (thru 6/6/2020)

6,303

102,189

0

20,000

40,000

60,000

80,000

100,000

120,000

Unemployment Insurance Weekly Claims

Initial Claims Continued Claims

Sources: (top) U.S. Department of Labor; count totals are compiled by reflecting week ended; (bottom) New Hampshire Department of Employment Security www.nhes.nh.gov/index.htm

New Hampshire Housing | June/July 2020 Housing Market SNAPSHOTNHHFA.org4

Employment by Type of Business (May 2020 v. May 2019)

Title on HMS Header:

Industry %ChangeAmusement, Gambling, and Recreation Industries -74.76%Full-Service Restaurants -70.77%Accommodation -65.52%Arts, Entertainment, and Recreation -63.28%Leisure and Hospitality -54.30%Restaurants and Other Eating Places -53.47%Accommodation and Food Services -52.40%Food Services and Drinking Places -50.19%Limited-Service Restaurants and Other Eating Places -29.61%Department Stores -20.59%

Source: NHES

Impact of Coronvirus on Types of Employment in NHMay 2020 vs. May 2019

6,303

INIT

. CLA

IMS

102,189

CON

T.CL

AIM

S

Sources: (top) Freddie Mac Primary National Mortgage Market Survey; US Federal Reserve Selected Interest Rate H.15; (bottom) The Warren Group


INTEREST RATES MAY 2020 Mortgage Interest | Fed Funds | 10-Year Treasury

New mortgage activity during May 2020 compared to May 2019

declined by 34%. Even more striking is the 40% decline in new

mortgages for homes under $300,000.

The housing market at most price ranges is still tight, particularly so

for homes under $300,000.

However, influenced by very low interest rates, refinancing activi-ty continues to play a big role in

mortgage activity in the state. NH household refinancing activity

year-to-date is nearly three times higher than last year at this time

Source: Warren Group

Mortgage Activity in NH May-2019 May-2020 Percent Change YTD 2019 YTD 2020 Percent

ChangeAll Mortgages 3,619 5,357 48% 13,319 21,632 62%Purchase Mortgages 1,921 1,261 -34% 6,403 5,548 -13%Refinance Mortgages 1,698 4,096 141% 6,916 16,084 133%

All Mortgages up to $300K¹ 2,518 3,564 42% 9,595 14,516 51%Purchase Mortgages up to $300K¹ 1,250 749 -40% 4,288 3,436 -20%Refinance Mortgages up to $300K¹ 1,268 2,815 122% 5,307 11,080 109%¹Conforming loans

Mortgage

10 Year Treas

Fed Rate0

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20

PER

CEN

T

Mortgage Interest Rates Fed Funds Rate 10 year Treasury

3.62%

0.67%

1.55%

3.23%

0.05%

MORTGAGE ACTIVITY

3.23%

MO

RTG

AG

E

0.05%FED

FU

ND

S

0.67%TREA

SURY

YEAR- OVER- YEAR

YEAR TO-DATE

MLS LISTINGS

Source: Based on information from the Northern New England Real Estate Network and compiled by NHHFA. Excludes land, interval ownership, seasonal camps/cottages, multi-family properties, mobile/manufactured homes and commercial/industrial property.

MONTHS OF SUPPLY OF INVENTORY

3.3

1.71.0

-

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4

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20

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18

20

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MO

NTH

S

Active & Pending Active Only Active up to $300K

Months of supply of inventory shows how many

months it would take for the current inventory of homes on

the market to sell, given the current pace of home sales.

As has been the case for the past five years, homes under

$300,000 are generally on the market for only a month.

PENDING SALES include properties that are defined as Pending and Active

Under Contract.

ACTIVE UNDER CONTRACT is for prop-erties that have an accepted contract

and the seller wishes to keep marketing the property in an effort to obtain a

backup offer.

PENDING is for properties that have an accepted contract and the seller has

ceased marketing and/or showing the property.

ACTIVE is for properties actively avail-able on the market and that do not

have a contract on it.

3.1

1.6

1.1

-

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6

8

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12

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MO

NTH

S

Active & Pending Active Only Active ≤ $300K

3.3

1.71.0

-

2

4

6

8

10

122

01

3

20

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MO

NTH

S

Active & Pending Active Only Active up to $300K

3.1

1.6

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NTH

S Active & Pending Active Only Active ≤ $300K

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

January February March April

NU

MB

ER O

F LI

STI

NG

S

2018 2019 2020 -

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000


NU

MB

ER O

F LI

STI

NG

S

2018 2019 2020

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000


NU

MB

ER O

F LI

STI

NG

S

2018 2019 2020


27%

JUNE 20198,710

JUNE 20206,352

- 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

10,000

NU

MB

ER O

F LI

STI

NG

S

2018 2019 2020

3.3

1.0 1.7

Source: Based on information from the Northern New England Real Estate Network and compiled by NHHFA. Excludes land, interval ownership, seasonal camps/cottages, multi-family properties, mobile/manufactured homes and commercial/industrial property.

MLS MEDIAN SALES PRICE

MLS CLOSED SALES


$120

$140

$160

$180

$200

$220

$240

$260

$280

$300

$320

20

06

20

08

20

10

20

12

20

14

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16

20

18

20

20

Tho

usa

nd

s

All Homes 12 per. Mov. Avg. (All Homes)

$120

$140

$160

$180

$200

$220

$240

$260

$280

$300

$320

20

06

20

08

20

10

20

12

20

14

20

16

20

18

20

20

All Homes 12-Mo Moving Average (All Homes)

$120

$140

$160

$180

$200

$220

$240

$260

$280

$300

$320

20

06

20

08

20

10

20

12

20

14

20

16

20

18

20

20

All Homes 12-Mo Moving Average (All Homes)

$120

$140

$160

$180

$200

$220

$240

$260

$280

$300

$320

20

06

20

08

20

10

20

12

20

14

20

16

20

18

20

20

All Homes 12-Mo Moving Average(All Homes)

$120

$140

$160

$180

$200

$220

$240

$260

$280

$300

$320

20

06

20

08

20

10

20

12

20

14

20

16

20

18

20

20

Tho

usa

nd

s

All Homes 12 per. Mov. Avg. (All Homes)

33%

MAY 20192,128

MAY 20201,428

$310KMA

Y

2020

$284K

9%

MA

Y

2019

-

200

400

600

800

1,000

1,200

1,400

1,600

January February March

NU

MB

ER O

F S

ALE

S

2018 2019 2020 -

200

400

600

800

1,000

1,200

1,400

1,600


NU

MB

ER O

F S

ALE

S2018 2019 2020

-

200

400

600

800

1,000

1,200

1,400

1,600


NU

MB

ER O

F S

ALE

S

2018 2019 2020

May 2020 1,428

May 2019 2,128

CLOSED SALES

33%

-

500

1,000

1,500

2,000

2,500

January February March April May

NU

MB

ER O

F S

ALE

S

2018 2019 2020

8

BUILDING PERMITS ISSUED IN NH Single-Family & Multi-Family Units

8

Source: U.S. Census Bureau, Construction Statistics Division (12-month moving average of actual permits issued)

0

100

200

300

400

500

600

700

20

00

20

01

20

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NU

MB

ER O

F P

ERM

ITS

PER

MO

NTH

Single Family Units Multi-Family Units

This graph reflects the status of building permits issued as of May 2020. There is a decrease

in multi-family construction permits; it is unclear at this time

if the decrease is related to the COVID-19 crisis.


WHERE DO NH HOMEBUYERS COME FROM? NH Residential Sales (2016 - Q1 2020)

One pandemic impact trend that economists and demographers

are tracking is the movement of families from urban areas to

suburban or rural areas.

Many people who typically worked in an office environment full or part-time have found they can capably work remotely. This

could influence where people live – regardless of where their employers are located – if they can successfully work from any

location that has Internet access.

New Hampshire is regarded by many as a largely rural state and is a popular place for people to have

a second home. Any significant changes in people moving to New

Hampshire will be of interest.


Source: The Warren Group

16,724

MASSACHUSETTS MAINE

CONNECTICUT

FLORIDA

VERMONT

83,663

1,062

NEW HAMPSHIRE

1,429

1,229

1,183

2020 NH RESIDENTIAL RENTAL COST SURVEYMedian Gross Rent New Hampshire Housing

annually conducts a statewide survey of rental costs of mar-

ket-rate apartments. This pro-vides data to the public and

housing-related organizations. This year’s survey was especially challenging as it was carried out from January - May, overlapping

with the Governor’s “stay-at-home” emergency order.

Preliminary results show that that it continues to be a tight and

challenging market for renters. The survey found rents have in-

creased for 2-bedroom units (5%) and all units (2%) from last year.

On a positive note, however, the vacancy rate is nearly 1% high-er for all units than last year (a 5% vacancy rate is considered

balanced between tenants and landlords). There was an in-

crease in multi-family building permits in 2017; the construction

and lease-up of these new units could have improved the vacancy

rate this year.

We do not know yet how the coronavirus may have impacted the vacancy rate and lease-ups.

The full report will be available in mid-July at

NHHFA.org/publications-data.


Source: 2020 New Hampshire Residential Rental Cost Survey (NHHFA)

Median Gross Rent

$1,280$1,251

$1,177$1,143$1,113$1,069

$1,413$1,347$1,296

$1,259$1,206

$1,157

202020192018201720162015

All Units 2-Bedroom Units

1.8%

1.7%

0%

1%

2%

3%

4%

5%

6%

202020192018201720162015201420132012201120102009

All Units 2-Bedroom Units

BALANCED

TURNOVER

Vacancy Rates

NHHFA.org2020 RESIDENTIAL RENTAL COST SURVEY

2-BR $1,413 +5% from last year

ALL $1,280 +2% from last year

5-year change +22%

5-year change +20%

NEW HAMPSHIRE HOUSING FINANCE AUTHORITY

P.O. Box 5087 | Manchester, NH 03108 | 603-472-8623

[email protected] | NHHFA.org

As a self-supporting public corporation created by the state legislature, New Hampshire

Housing Finance Authority promotes, finances, and supports affordable housing.

Commentary SNAPSHOT...HOUSING MARKET SNAPSHOT Q1 2020 7,603Q2 2019 105,733 INITIAL CLAIMS FILED 0...

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