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Tight Rental Market Continues Statewide
July 7, 2017
Low vacancy rates and rising rents indicate tight rental market in state continues –
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The 2017 New Hampshire Housing survey of the Granite State’s residential rental units confirms what those who have looked for an apartment in Hillsborough, Rockingham, Strafford and Merrimack counties already know: it is really difficult to find an affordable place to rent.
The annual telephone survey, conducted by the University of New Hampshire Survey Center, polled the owners and managers of more than 26,000 unsubsidized (market rate) rental housing units around the state (20% of the total number of units). The survey found that the statewide median gross rent of $1,263 (including utilities) for two-bedroom units has increased over 4% since 2016 – the fourth year in a row that rents have increased.
Meanwhile, the vacancy rate continues to decline; this year it stands at 1.4% for two-bedroom units. An average vacancy rate of 4% to 5% is considered a balanced market for supply and demand.
All 10 of the state’s counties saw an increase in median gross rent, with rents – as expected – highest in the southern counties near the state’s largest cities and close to employers as well as the Boston job market. This is also where most of the state’s rental housing properties are located.
To afford the $1,263 monthly statewide median rent for a two-bedroom apartment with utilities, a renter would have to earn 131% of the median renter income, or over $50,400 a year. A 2014 New Hampshire Housing study found that almost half of renters in the state pay more than 30 percent of their income on rent, and low-income families are particularly likely to be paying this much or more for their housing.
While there has been an increase recently in the construction of new rental housing, these tend to be higher-end units with amenities. Young working professionals and older individuals who are downsizing their households are competing for these units, further driving up rental costs. The ongoing tight housing market also reflects low- to moderate-income households that continue to rent because there’s a scarcity of affordable homes to buy.
“To meet the needs of a growing economy, there is a demand for ample affordable housing for workers. This continued trend of low vacancy rates suggests that additional rental housing construction is needed to satisfy the demand,” noted Dean Christon, executive director of New Hampshire Housing.
Last year, NHHFA financed the creation or rehabilitation of more than 1,000 high-quality affordable rental units for working families and seniors, and provided direct rental assistance to thousands of very low-income households. This translates to an investment of about $150 million into the state’s economy last year.
New Hampshire Housing is committed to working creatively to provide housing to meet the needs of our state’s residents and businesses. Through these efforts, economic activity and business growth in the state are stimulated; jobs in construction, real estate and lending are supported; and the availability of affordable workforce housing is increased.