Ever since the pandemic, the housing
market has been difficult for buyers, especially for young and first-time
buyers. Housing prices have been rising
at a rate much faster than both the overall inflation rate and the growth in household
income. At the same time, mortgage interest rates jumped 4.5percentage points
between 2020 and 2023. 

These changes put potential buyers in a
double bind. Not only are homes more
expensive, but financing the purchase is also more costly. As a result, the average monthly mortgage
payment as a share of a new buyer’s income doubled between 2020 and 2023.

Hence, it should not be a surprise that
homebuying and homeownership declined in North Carolina this decade. In 2024 the percentage of households who were
homeowners was 65%, down from 69% in 2020 and well below the 72% at the
beginning of the 21st century.

These changes are troubling for several
reasons. First, many households who
would prefer to live in single family homes instead of high density units are
being denied that choice. Second,
single-family homes have traditionally been a way for young households to build
wealth as their home increases in value over time. Among all households, including homeowners
and renters, home values account for almost a quarter of all wealth. For just homeowners, home values account for
half of their wealth.  And unlike many
investments, such as stocks, it is rare for home values to decline.

Some argue there are also non-financial
benefits to owning a home. Children
living in homes have more access to outdoor activities, thereby getting more
exercise and exposure to fresh air and sunshine. Homes with outdoor space, in particular, can
provide opportunities for children to have chores, thereby allowing them to
learn about work and responsibility. Last, there may be a psychological benefit
to the family from the pride of owning and maintaining a home.

How can we return to an economic
environment where home affordability improves and more households – especially
young households – can easily purchase a home? The answer is easy. We need more
homes built, we need home prices to stop outpacing household income, and we
need lower mortgage interest rates. 

Accomplishing this recipe is not easy, but
there are some positive signals giving us hope. 
Like the nation, home construction has been inconsistent in North
Carolina. Understandably, there was a
big drop in home building during the pandemic. Subsequently there was a strong
rebound immediately after the pandemic. But the rebound was cut short by the surge in inflation in 2022 and
2023, which pushed up construction costs.

But once the Federal Reserve (the “Fed”) enacted
policies to lower the inflation rate, housing construction recovered. However, during the last two years of 2024
and 2025, there’s been an erratic pattern in home construction with no clear
path. Experts think uncertainties
related to interest rates, tariff rates, and the economic health of households
are affecting builders. However, one
piece of good news is home construction today is running at a higher level than
before the pandemic.

Home prices continue to rise in North
Carolina, but the pace has slowed. When
price changes are tracked for homes with the same features – such as square
footage, number of rooms, etc.- there’s been over a 70% rise between 2020 and
2025. But three-quarters of that
increase occurred between 2020 and 2022. Since then, home prices have been
rising at single-digit annual rates.

Lastly, an overall measure of housing
affordability that accounts for home prices, mortgage interest rates, and
household income shows bad news and good news. The index sank by more than 50% from 2020 to 2024. But during some months in 2025 the index rose
very modestly, mainly due to moderating home price inflation, some reduction in
mortgage interest rates, and improvements in household income.

So, what’s the conclusion? Are there any signs the housing market is
getting better for buyers? Also, what
should you look for to anticipate that buying a home will become easier?

The analysis I’ve presented does indicate
some positives in the housing market in terms of moderating price increases,
continued construction, and modest declines in mortgage interest rates. Indeed,
in the past two years, the 30-year fixed mortgage interest rate fell
three-quarters of a percent to near 6.5%. This is certainly higher than the sub 3% rate immediately after the
pandemic. But that historically low rate
was a result of the Fed pumping enormous amounts of cash into the economy to
overcome the Covid recession. We later
paid for that policy with an annual inflation rate over 9%. While the Fed won’t
push mortgage rates back to 3%, they have strongly indicated they are ready –
perhaps as early as September – to support lower interest rates, including
mortgage rates. So, watch for interest
rate announcements from the Fed.

If the Fed does lower interest rates, the
action could cause increased home construction as builders become more
optimistic about households’ ability to purchase homes. This could moderate home price increases to
be more in line with the improvements in worker earnings that have been
occurring. Therefore, if you’re in the market to buy a home, continue to watch
trends in construction and prices. There
may be some good news ahead.

The housing market has been tough for
buyers in recent years. But are there
some changes occurring that could make a home purchase easier? You decide

__________________________

Dr. Mike Walden
is a William Neal Reynolds Distinguished Professor Emeritus at North Carolina
State University.

The median home in Collier County listed for $717,000 in July, down 2.7% from the previous month’s $737,000, an analysis of data from Realtor.com shows.

In case you haven’t noticed, the real estate market is changing, but more than one New Jersey town remains strong in the real estate world.

The Hottest Real Estate Zip Codes In America

While most towns across the nation are finding homes for sale staying on the market longer, and fewer of the homes getting the asking price, two zip codes in the Garden State have made a small list of real estate “hot” zip codes.

The report, published by Newsweek, examined zip codes across America to determine which ones were handling the current real estate market the best.

New Jersey was the only state in the nation with two towns on the list of towns that continue to shine in a real estate market that is slowing down in the majority of the country.

Which New Jersey Towns Are Doing The Best In The Real Estate Market?

The New Jersey towns that made the “hot zip code” list might surprise you, but here they are. It’s good news for Newark and New Brunswick.

Read More: New Jersey’s Hidden Gem Town

Those New Jersey towns are two of only 5 with a higher percentage of sellers than buyers, making those markets seller’s markets.

The other towns in that top 5 are Minneapolis, Minnesota, Montgomery County, Pennsylvania, and Nassau County, New York.

Hottest Real Estate Markets In New Jersey

The real estate market had been on fire, with so many sellers getting well over asking price for their homes, but in most places, things have cooled down a bit.

But not in New Brunswick and Newark, and that’s good for some New Jersey residents trying to sell their home.

While home prices might be moderating in other parts of the country, the median price of a single-family house in New Hampshire rose to $550,000 in August, the second highest price point this current year.

That price is just $3,000 more than the $547,000 recorded in July, but it is $47,500 more than January’s $502,500. The highest median price in 2025 was $569,450, recorded in June and the most ever recorded in the state.

“It is still very much a seller’s market across the state,” said Susan Cole, president of the New Hampshire Association of Realtors (NHAR), reacting to the association’s data for August.

The median price of a single-family house in New Hampshire rose to $550,000 in August, the second highest price point this current year.

High demand and scant inventory make for a seller’s market, which tends to drive up prices, particularly in certain locations in the Granite State.

“It’s also important to note that not all parts of the state are experiencing the same housing market,” said Cole, owner/broker of Susan Cole Realty in Lebanon. “For instance, over the summer months, Grafton, Carroll, Cheshire and Merrimack counties saw relatively significant price increases, while Belknap and Strafford counties clearly saw prices cool off. Even within each county, the housing market can vary from town to town.”

Certain metro markets in the country are seeing year-over-year declines in home prices —particularly Austin, Texas (-4.47%), Dallas, Texas (-2.55%), Oakland, California (-1.81%), San Antonio, Texas (-1.03%), Tampa, Florida (-4.20%) and West Palm Beach, Florida (-1.59%).

Nationally, according to Newsweek, prices are still rising, but at a slower rate in more than a decade. The median sale price of the typical U.S. home in July was up 2.9 percent from a year earlier, the lowest rate since Redfin began collecting data in 2012, according to Newsweek.

Cole said she is hearing reports that sellers in some parts of the state are adjusting their asking prices downward.

“Some sellers are overshooting on pricing and then need to adjust their expectations, especially in the higher-end market,” Cole said. “There are indications that prices are stabilizing. Last winter, single-family median prices were still increasing by 10%, but over the past several months, we’ve seen increases of 3% to 4%. The rate of housing price increases is decelerating, and whether that trend continues will depend on economic conditions and whether inventory increases.”

In August, housing advocates celebrated Gov. Kelly Ayotte’s signing of several bills aimed at helping create some much-needed inventory.

According to Housing Action NH Director Nick Taylor, the new laws will help increase accessible and attainable housing options for the workforce, young families, seniors seeking to age in place, and people with disabilities.

“Thanks to continued bipartisan collaboration at the State House, it will now be easier for Granite Staters across New Hampshire to create attainable homes on their own property, revitalize aging strip malls and office buildings, cut through burdensome red tape, and streamline the approval process,” Taylor said. “While our work is not done, these laws represent common-sense steps that make meaningful progress toward addressing our housing shortage.”

Among the bills signed by Ayotte:

• HB 428: Establishes a uniform statewide building code to reduce confusion, cut red tape and make housing safer and more affordable.
• HB 457: Prevents municipalities from restricting occupancy or discriminating based on household makeup, opening more affordable housing options.
• HB 577: Expands and simplifies rules for accessory dwelling units (ADUs), enabling more flexible, affordable housing options for families.
• HB 631: Enables the conversion of underused commercial properties into housing.
• SB 153: Sets a 60-day deadline for state driveway permits on multifamily projects to reduce delays and speed up construction of new housing.
• SB 173: Adjusts property tax assessments for housing built using the Low Income Housing Tax Credit program to support affordability and financial stability for low-income communities.
• SB 188: Permits licensed third-party inspectors to expedite safe building inspections, reducing delays and supporting faster development.
• SB 281: Makes it easier to build along non-maintained roads while protecting municipalities from added liability.
• SB 282: Allows cost-effective, safe construction of mid-sized residential buildings with one staircase under modern fire safety standards.
• SB 283: Modernizes zoning by removing outdated space and height restrictions to encourage efficient, smarter housing development.
• SB 284: Eases parking requirements for new housing to lower costs and promote smart growth.

“Tackling our housing crisis is critical to keeping New Hampshire the best state in the nation for economic opportunity,” Ayotte said in a statement. “From streamlining our state permitting process, to cutting unnecessary red tape, to expanding opportunities for new housing construction, and more, we made important strides this year.

“I thank the legislators, advocates, and private sector partners who worked to bring these bills to my desk, and I look forward to continuing to work together to bring more housing to our state for our young people, our seniors, and for all of New Hampshire,” Ayotte said.

Some of these new laws are seen as a usurpation of local control.

In the town of Newington, for example, with its relatively expensive residential community wholly separated from its commercial zone by the Spaulding Turnpike (Route 16), there was discussion among selectmen, residents, and state Rep. David Meuse (D-Portsmouth) about HB 631.

Board of Selectmen Chair Chris Wayss told Meuse, according to meeting minutes from an Aug. 4 meeting, that the bill removes local control of zoning and, in fact, conflicts with state law (RSA 674:17) that outlines the legally mandated purposes for which a municipality may adopt zoning ordinances.

Residents expressed concern that commercial-to-residential conversions will negatively impact education and police and fire protection in town.

While saying the bill may need some modification, the law’s intent is important as a means to address the housing issue in the state. He specifically pointed to young people who can’t afford housing in New Hampshire and are moving out of the state, according to the minutes.

Newington is located in the Seacoast region, where the median price for a house in August was $855,000, according to data from the Seacoast Board of Realtors.

Based on her assessment of NHAR statistics, Cole noted closed sales increased 5% this summer compared to the summer of 2024, and the number of homes for sale were at their highest level since 2020.

“However, we are still a long way from a balanced, healthy real estate market,” she said. “There are 2.4 months of housing supply in the state, whereas a balanced market is about 6 months of supply. New Hampshire hasn’t seen six months of supply since 2016, indicating that the demand for housing in our state is as strong as ever.”

Here is the progression of single-family home median prices so far this year:

January $502,500
February $512,50
March $525,000
April $530,000
May $540,000
June $569,450
July $457,000
August $550,000

Here, by county, are the median prices for a single-family home in August:

Belknap $502,000
Carroll $570,000
Cheshire $377,500
Coos $275,000
Grafton $441,500
Hillsborough $586,000
Merrimack $527,500
Rockingham $689,000
Strafford $520,000
Sullivan $410,000
Entire state $550,000

Here are the median prices for a residential townhouse/condominium in each county for August:

Belknap $520,000
Carroll $334,500
Cheshire $320,000
Coos No sales recorded
Grafton $351,500
Hillsborough $375,000
Merrimack $335,251
Rockingham $530,000
Strafford $532,375
Sullivan $417,000
Entire state $415,000

Conference to address housing shortage

Tackling housing needs with local action is the focus of the annual Housing and Economy Conference that New Hampshire Housing will hold on Oct. 16 at the Grappone Conference Center in Concord.

One conference panel will look at approaches some local communities are using to enable housing development and build community support, showing what’s possible when towns make housing a priority.

Another panel will showcase local housing projects as examples of what can be done “when vision, persistence, and collaboration come together,” according to the conference program.