New Hampshire rental availability rate well below national averages
There are very few signs like this in New Hampshire. (Getty Images)
For years, New Hampshire has had an unsavory distinction: the state with one of the lowest rates of rental availability around.
The national rental vacancy rate is 5.8 percent, according to the U.S. Census Bureau. The average in the Northeast is 4.9 percent. The target number recommended by housing economists as a sign of a healthy market is 5 percent.
New Hampshire’s vacancy rate is 0.5 percent.
The number comes from Monday’s 2022 Residential Rental Cost Survey report, the latest annual snapshot from New Hampshire Housing and the University of New Hampshire Survey Center. The report, which relied on telephone and online surveys of 9,662 units across the state, is dotted with bad news for New Hampshire renters and prospective workers.
Rents for all New Hampshire units have increased 32 percent since 2017. The median price for two-bedroom housing is $1,584 – $300 more than in 2018. Those increases have appeared nationally, too. Apartment openings are vanishingly few, and median rents are more expensive than most people’s salaries can sustain.
The shortage creates real hardships for renters and non-renters alike, noted Nick Taylor, executive director of the Workforce Housing Coalition of the Greater Seacoast, an advocacy group.
“Any community you go to right now, you’re seeing almost every business has a ‘Now Hiring’ sign right on the window,” he said. “And it’s because we desperately need the workers and they can’t find the rental housing.”
The problem affects workers attempting to enter the market, Taylor said, but also families trying to expand their living space and senior citizens looking to downsize. And the shortage appears to be hitting New Hampshire acutely.
“It’s definitely something that continues to be eye-opening about how out of step New Hampshire is nationally, even in the Northeast,” Taylor said.
Two-bedroom units are most expensive in counties such as Hillsborough, Grafton, and Rockingham, where the median rents range from $1,700 to $1,800 per month, according to the new report. They’re particularly high in Portsmouth, at a median of $1,762, and Nashua, at $1,980.
“The survey results reflect a continuation of a theme that is of great concern to residents, business owners, and public officials in the state: there is a high demand for apartments, a very limited supply, a low vacancy rate, and pressure on affordability,” wrote New Hampshire Housing Executive Director Rob Dapice in an introduction to the report.
The dollar number of the rent tells only half the story. In Sullivan County, only 7 percent of two-bedroom units are priced below the median affordable rent, based on income, the lowest in the state. In Grafton and Hillsborough counties, that number ticks up to 8 percent. In comparison, Cheshire and Merrimack counties have 24 percent and 21 percent of units that are below the affordability line, respectively.
Statewide, a household income of $63,400 is needed to afford a median apartment – 131 percent more than the actual state median, according to the report. In Grafton County, the median rents are 160 percent higher than the corresponding incomes.
Meanwhile, availability has plummeted, even in more remote counties. In 2013, Coos County had a 9.5 percent vacancy rate among its units; in 2022, the vacancy rate was 2.7 percent. Belknap County, which had a 7.5 percent vacancy in 2013, now has 0.7 percent of its units vacant.
The state’s low availability of rental units has persisted as homes have been increasingly harder to buy, too, with unusually low levels of inventory, record-high prices, and few new houses being built due to construction supply shortages.
According to Ben Frost, deputy executive director at New Hampshire Housing, that difficult buying market has caused the rental market to swell, too. A double whammy of high home prices and climbing mortgage rates have kept the prospect of owning a new home out of reach for people on the lower end of the income spectrum.
“And so, to the extent people are unable to buy, then they’re going to be renting, which puts more pressure on the rental market,” Frost said in an interview.
Competition among renters is also affecting prices. The monthly rent of a one-bedroom apartment has climbed in the past year, enough that it is closing in on the rent for a two-bedroom in some areas, Frost noted.
That shift could indicate that smaller, higher-priced units are coming onto the market. It could show that developers are targeting their units to younger, millennial, and Gen Z tenants, who may be OK with a smaller size and willing to pay more for a nicer building.
But it also could mean that couples and families are increasingly pushed into smaller, single-bedroom units to save money, Frost said. Whether that proves to be a long-term trend will require further research, he said.
For Taylor and other housing advocates, New Hampshire’s abnormally low level of rental availability is adding urgency to efforts to build more affordable units across the state.
The Workforce Housing Coalition of the Greater Seacoast is focused on advocacy for more housing, Taylor said, with a goal to build support among residents and town officials near the Seacoast to change local zoning ordinances and build support for new units.
Those efforts are not limited to one type of housing. They include “the whole spectrum,” from developments to condos to townhouses to duplexes to manufactured homes, Taylor said. The coalition is organizing walking tours of those environments, bringing stakeholders and residents to downtown Exeter one day and to manufactured home parks another day to demonstrate the different options.
The housing crunch is forcing families into difficult choices and taking an economic toll on New Hampshire businesses, Taylor said. The solution, he added, lies in helping residents connect the dots.
“There’s such a disconnect between what the people want and what our businesses need and where our policies allow things to move forward right now,” Taylor said. “And until that gets back in sync … we’re not going to be able to solve this.”
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