First, the good news: Building permits issued by New Hampshire towns and cities for new single-family and multifamily housing units are at their highest levels in nearly 20 years, according to new state report.

But now the bad news: The number of housing units issued permits is still well below what’s needed to meet demand and bring price affordability to the state’s real estate market.

“We’re making progress,” said Heather Shank, director of the division of planning and community at the state Department of Business and Economic Affairs, which just released its annual report on housing trends statewide.

“The [building permit] numbers are heading in the right direction. We’ve been creeping back up. But it’s not at the pace needed to reach our goals.”

Indeed, the New Hampshire Housing Finance Authority has estimated that tens of thousands of additional housing units are needed to correct a severe supply-and-demand imbalance that’s been driving home prices ever upwards for years now.

Most Permits Since 2005

Nonetheless, recent increases in issued building permits is encouraging news for a state in desperate need of more housing, officials say.

According to a BEA report issued earlier this year, building permits for both single-family and multifamily homes hit 5,822 units in New Hampshire in 2024, the highest number since 2005.

That growth is part of a slow-but-steady increase in building-permit issuances since 2008, when the nation’s subprime-home market collapsed and nearly took the U.S. economy down with it.

Then again, current permitting levels aren’t even close to the annual 8,000-plus housing units that were permitted in New Hampshire in the early 2000s.

The state hasn’t yet compiled 2025 building-permit data via BEA’s regular surveys of every town and city in New Hampshire.

But preliminary 2025 data from the U.S. Census Bureau shows that the total number of units issued building permits last year in New Hampshire was up about 2 percent compared to 2024, bucking a national trend of falling building permits across most of the U.S.

New Hampshire’s single-family housing permits for last year were even more striking, jumping by 14 percent to 3,315 units, the second-highest percentage increase in the nation after the District of Columbia, according to data provided by John Burns Research and Consulting.

“New Hampshire’s numbers are impressive,” said Chris Porter, senior vice president of research at John Burns, a consultancy serving major homebuilders and multifamily developers. “New Hampshire is one of the few states in the country that saw an increase last year in single-family building permits. The fact they’re seeing such growth in single-family permits is pretty incredible.”

By comparison, much of the country – particularly in Sunbelt states like Texas and Florida – saw an overbuilding of housing in recent years, causing a drop in home prices and a corresponding slowdown in new construction, said Porter.

In general, the Northeast and Midwest are faring better today, at least in terms of increasing building permits, precisely because they haven’t experienced building booms in recent years, Porter noted.

What’s Driving NH Growth?

Zeroing in on New Hampshire’s performance, the big local question is: What’s driving the state’s somewhat impressive permitting gains of late?

Some experts partly attribute it to recent state housing initiatives, such as the recently-cancelled Housing Champions program that awards grants to towns and cities pursuing pro-housing growth policies.

Others attribute the gains to a market slowly responding to strong demand, despite NIMBY zoning obstacles routinely thrown in the way of developers by local governments.

Heather McCann, managing director of engagement, policy and communications at the New Hampshire Housing Finance Authority, expressed concern that many of the building permits being issued are for seasonal vacation homes, not primary homes sought after by full-time residents.

The BEA report doesn’t distinguish between seasonal and primary-home permits because most local governments don’t stipulate such differences on permits.

“We’re definitely permitting more homes,” said McCann. “We’re trending upwards – and that’s great. But the question is: What type of homes are we permitting?”

The fear: many of the newly issued permits are for out-of-state residents seeking to build vacation homes in New Hampshire, not new homes for full-time Granite Staters.

McCann also noted that issuing housing permits is one thing – but actually building housing is another.

“Just because something is permitted doesn’t mean it’s actually getting built,” she said. “It gets tricky when trying to track actual construction. It’s a challenge. It’s not a perfect science.”

Multifamily Makes Up Larger Share

While there may not be hard annual data on actual finished home construction, the BEA report noted that multifamily housing “continues to play an increasingly important role in meeting housing demand” in New Hampshire.

Based on historic construction trends, the agency estimates that of all the new housing units built last year in New Hampshire, 62 percent were in multi-unit buildings, the highest share recorded since the state’s housing survey began in the mid-1970s.

Matt Mayberry, CEO of the New Hampshire Home Builders Association, said he welcomes the recent increase in building permits being issued.

But he said it’s not enough. The state needs tens of thousands of additional new housing units, he said.

Mayberry also said issued permits are increasingly coming with financial strings attached, such “impact fees” that are applied to the number of bedrooms in a given development.

“It’s the higher permit fees that no one is talking about,” he said.

“It’s the undocumented, unseen impact fees towns are slapping on developers. It’s getting more and more expensive to get those permits.”