The pace of home-price increases has steadily slowed across Southeastern New Hampshire since April. iStock illustration
New data shows the two main housing markets in New Hampshire are seeing home price growth decelerate – just as some observers fear the Federal Reserve’s planned interest rate cuts could push them higher once again.
An index Zillow researchers use to measure home values in metro areas across the country showed declines in the pace of growth in the Manchester area in June and July, and in the Greater Boston metro – which includes Rockingham and Strafford counties here – in May, June and July.
The Zillow Home Value Index for the Manchester-Nashua metro (synonymous with Hillsborough County) increased only 8.25 percent year-over-year in July, down from 8.9 percent in June and 9.27 percent in May.
The same index for the Boston metro area dropped to 7.38 percent year-over-year in July, from 8.24 percent in June, 8.98 percent in May and 9.19 percent in April.
The slowdown was also observable in sale prices. According to data compiled by The Warren Group, publisher of The Registry Review, the median single-family sale price in Hillsborough County for July was $520,000, 9.94 percent above the same month in 2023.
However, June’s was only 7.3 percent above the same month last year, May’s was 10.53 percent above its counterpart and April’s was up 19.29 percent.
Part of the culprit may be increasing inventory: In Hillsborough County, alone, starting in May every month saw steadily larger year-over-year increases in the number of single-family homes for sale, according to the New Hampshire Association of Realtors, from a 7.3 percent year-over-year bump in May to a 12.8 percent hop in July.
It matches a broader trend nation-wide.
According to the National Association of Realtors, total for-sale inventory of existing homes clocked in at 1.33 million units nationwide the end of July, up 0.8 percent from June and 19.8 percent from one year ago.
“Despite the modest gain, home sales are still sluggish,” NAR Chief Economist Lawrence Yun said in a statement. “But consumers are definitely seeing more choices, and affordability is improving due to lower interest rates.”
The trends even took place as the average interest rate on a 30-year, fixed-rate mortgage began a slow slide downwards, after hitting a peak for the year in the third week in April, thanks to improving inflation metrics.
According to mortgage-buyer Freddie Mac, the average rate on a 30-year mortgage hit 7.22 percent for the seven days ending April 25 and landed at 6.73 percent for the seven days ending Aug. 1.
Some observers have blamed the “mortgage rate lock-in effect” keeping homeowners with mortgage rates between 3 percent and 5 percent – thanks to the 2020-2022 refinance and home-sale booms – from countenancing putting their houses and condominiums on the market in order to trade up or down.
But experts say it’s likely prospective buyers, not sellers, who will perceive benefit for themselves.
“Easing inflation helped accelerate the decline in mortgage rates in mid-July, and rates currently hover near 15-month lows. This is likely to bode well for buyers in the fall—a typically advantageous season for home shoppers,” Realtor.com Chief Economist Danielle Hale wrote in a blog post analyzing July’s national home sales numbers.
But if buyers expect wins while most sellers stay put this fall, it’s possible home-price growth could accelerate again, some experts also say.
Statewide, the New Hampshire Association of Realtors said, numbers of new listings were up statewide by an average of 10.36 percent year-over-year each month in 2024 since the home-selling season kicked off in March.
However, the state is still below numbers of new listings it saw in 2022, much less the figures it clocked in before the pandemic. If buyers see falling mortgage rates and headlines about the Federal Reserve’s planned September cut to its benchmark interest rate and get excited, there won’t be much inventory to absorb the extra demand.
“If this relief from mortgage rates continues, we should see more buyers restarting their hunt for a home,” Zillow Chief Economist Skylar Olsen said in a statement about the national housing market. “But although rate-lock among homeowners is easing, they probably won’t be as motivated to jump back into the market and sell. With housing inventory still scarce, this improved affordability picture could reignite competition and sales as we head into the fall, or at least delay the usual post-summer cooldown.”
