Low housing inventories throughout much of the state continued to affect the mortgage market, with lenders seeing strong activity later in the spring while buyers had to compete for available homes. 

“The inventory for realtors and buyers is still very, very light,” said Sheila Walter, a mortgage loan officer with Holy Rosary Credit Union in Rochester. “It’s definitely still a seller’s market, and we’ve seen that for the last few years.” 

The state’s housing shortage leaves first-time homebuyers struggling to find homes, and lower interest rates have spurred existing homeowners into seeking alternatives to a new home, including refinancing to pay for home improvements and even building what they’re not able to buy. 

 $3B in Mortgages 

New Hampshire had $2.95 billion in mortgage activity for single-family homes from January through June 2019, about 2.6 percent more compared to the same time period last year, according to The Warren Group, publisher of The Registry Review. There were slightly fewer single-family mortgages in the first six months of 2019, 12,578 compared to 12,740 during the same time last year. 

About 53 percent of the single-family mortgages involved nonpurchase activity, with 6,725 loans worth $1.33 billion. Purchase activity accounted for 5,853 loans and $1.62 billion. 

The top lender for single-family homes during the first six months of 2018 and 2019 was Quicken Loans. About 72 percent of Quicken’s 924 single-family loans from January through June 2019 were for nonpurchase activity. 

The top loan originator for January through June was Jay Vogel, branch manager of Residential Mortgage Services in Nashua. He said 2019 will end as a record year for his firm, but it did not start out that way. RMS saw little mortgage activity in the first few months of the year, Vogel said. 

“We probably in 25 years never saw so much change – going from a dead market to record volume,” Vogel said. 

Working primarily in the Nashua and Merrimack markets, Vogel said lower interest rates helped spur the activity.  

The average interest rate on a 30-year, fixed-rate mortgage started the year at 4.51 percent, according to Freddie Mac, and finished June at 3.75 percent. The average rate for a 15-year fixed-rate loan slide from 3.99 percent to 3.18 percent over the same period. 

More inventory became available over the summer in the intermediate price range, Vogel said, but first-time homebuyers continued to see competition at the entry-level price range. 

Massachusetts residents added to the competition for these homes. Vogel said many of his customers decided to live in New Hampshire and commute to the Greater Boston area because they could not find affordable homes closer to work.  

Borrowers Expanded Homes, Bought New 

Construction of new homes was strong in the Nashua area, Vogel said, and other lenders in New Hampshire saw this same trend. 

Walter, with Holy Rosary Credit Union, works primarily with borrowers in Strafford County. She said some customers who could not find new homes decided to have them built instead, adding adding that the credit union has started to issue more construction loans compared to recent years. 

Other customers have decided to stay in existing homes and refinance, using the funds to improve or build additions on their houses. 

“The rates started to become more favorable, and we’re seeing more refinancing happening,” Walter said. 

Mascoma Bank in Hanover had a fast-paced spring season with purchase activity, said Sherry Noyes, a mortgage loan officer and assistant vice president with the bank. As customers made bids on homes shortly after being preapproved for a mortgage, many were in competition for the low inventory, which sold at or slightly above the asking price. 

Like Walter, Noyes has seen more homebuyers in recent years take out construction loans, even though building a new home costs more than buying an existing home. She has also noticed another trend with new construction: multiple contractors in Grafton County have built houses “on spec.” Buyers then take out mortgages and close on the house after the work is completed. 

“I’ve been in this line of work for 30 years, both as a realtor and a lender, and I hadn’t seen anybody willing to take that risk,” Noyes said. 

Another trend Noyes saw was people looking for enough financing to include solar panels in new construction or on existing homes. In past years, people built or bought solar–ready homes, Noyes said, with plans to add the technology later. 

Noyes did not see too many customers refinancing until rates started dropping even lower in the fall, when nonpurchase activity picked up. 

“The busiest fall that I’ve ever seen, when usually you start to see things slow down,” Noyes said. “People are concerned about what may happen to the rate market next year, but I am hoping for another really great year.”