Many New Hampshire homebuyers appear to have hit an affordability limit as real estate prices continue to soar across most of the state.

New data and anecdotes from real estate agents suggest buyers have become more cautious about what they will and won’t pay for homes, lengthening the days single-family houses and condominiums sit on the market and forcing some sellers to lower their sale price expectations a bit.

It’s not a huge shift in sentiment, real estate-watchers say, but ever-higher prices are definitely making many buyers think twice before committing to costly transactions.

“The buyers are more discerning,” said Adam Dow, owner of the Dow Group at Keller Williams Coastal, Lakes and Mountains Realty. “Pricing matters again. Location matters again. It’s getting more like a normal market.”

Put another way: The frenzy to buy homes seems to have ebbed of late.

What the Data Says

Whether the new mood lasts through the autumn market and the rest of 2025 is anyone’s guess.

Some think further Federal Reserve interest rate cuts this year, in addition to the quarter-point rate reduction two weeks ago, could generate more aggressive buyer behavior.

Last week, Fannie Mae economists declared their belief that it would take until the end of next year for average mortgage rates to sneak below 6 percent, and that they would rise modestly between now and the end of 2025 to around 6.4 percent.

But most industry figures interviewed for this story believe that affordability will remain a growing problem as long as there’s a severe supply-and-demand imbalance – an imbalance caused by an historically low inventory of homes for sale and lack of new home construction.

According to data from The Warren Group, publisher of the Registry Review, median prices for single-family homes rose by 4.9 percent in August, to $538,500, compared to August 2024. Condo prices rose by 4.3 percent in August, to $407,000, compared to the prior year.

Meanwhile, closed single-family home and condo sales were down in August, by 7.3 percent and 8.7 percent, respectively, compared to August 2024.

Those numbers compare to small overall sales gains, ranging from 2.5 percent for condos to 4.5 percent for single-family homes, during the first eight months of 2025.

The August sales decline came despite an 11.1 percent increase in new home listings last month, compared to the prior year, according to data from the New Hampshire Association of Realtors.

New listings through the first eight months of the year were up 11.6 percent.

The bottom line: buyers aren’t exactly snapping up the new listings, helping to lengthen the time homes sit on the market, data shows.

Manchester Has ‘Hit a Peak’

Sales activity was particularly off in New Hampshire’s two most populated counties, Hillsborough and Rockingham, which saw single-family home sales drop by about 11.8 percent and 15.9 percent respectively, according to The Warren Group’s data.

“Buyers are being more careful,” said Mark Lynch, a Manchester Realtor with RE/MAX Synergy. “In Manchester, I feel like we’ve hit some sort of peak. Prices are now running around $500,000 and up for single-family homes and sales are taking longer to complete.”

He’s noticed similar buyer hesitancy in neighboring Rockingham County, where he recently represented the seller of a three-bedroom home and barn on two acres in Derry, priced at more than $500,000

The 1860 home did need some work, but it amounted to relatively minor items, he said. Overall, the home and barn were quintessentially quaint New England.

“We got incredible responses on social media and the open houses were packed,” said Lynch. “But we could barely squeeze out a competitive offer. It threw me off.”

Prices Too High for Many

He said prices have simply gotten too high for many buyers, particularly first-time homebuyers.

Susan Cole, a broker owner of Susan Cole Realty Group in Lebanon and 2025 president of the NHAR, said affordability has become a problem throughout the state, not just in Hillsborough and Rockingham counties.

She noted that the NHAR’s affordability index – which measures whether a typical family earns enough income to qualify for a mortgage on a median-priced home – continues to worsen across the state.

“Until we get more inventory in New Hampshire, affordability is going to remain a major issue,” she said.

In the Lebanon area, home prices continue to rise despite the recent bump up in new listings, she noted.

And those higher prices are softening demand.

“I’m telling sellers to do more deferred maintenance before sales,” she said. “I’m also telling sellers to be more diligent about their prices. The market has loosened up a bit. It’s more fluid.”

Not only are buyers more hesitant to pull the trigger.

They’re also increasingly insisting on home inspections before purchases – a practice some buyers would forgo during past buying-frenzy years, industry officials say.

Cole said it’s unclear how potential Fed interest rate cuts might impact market dynamics. She noted that rate reductions don’t always lead to immediate cuts in mortgage rates.

“It’s not a one-to-one ratio,” she said.

A Lull in Sunapee Area

Dave Smith, owner of Harbor Light Realty in Sunapee, said there’s been a market lull in his region for the past few months, following a relatively strong spring market.

“I think many people are just holding off,” he said of both buyers and sellers.

In addition to increasingly higher prices in general, first-time homebuyers are now facing competition for lower-priced homes, in the $300,000 to $350,000 range, from out-of-state buyers who are paying hard cash for homes in the Sunapee area, he said.

“They’re seeing it as investments,” Smith said of non-New Hampshire residents buying properties in the Sunapee area. “People think they can just rent out the homes for a while.”

Like other agents, Smith questioned whether future interest rate cuts – and thus possible mortgage rate cuts – will make much of a difference in coming months.

Lower interest rates might attract more buyers into the market, but that will only intensify competition and drive prices higher, he said.

“Everything goes up to meet demand,” he said.