The rental market in New Hampshire, like much of the United States, has seen significant fluctuations over the past few years. The dynamics between the rental and home-buying markets are closely intertwined, with shifts in one often impacting the other. When home prices fall, landlords are more likely to purchase properties to rent out, leading to a correlated rise in rental prices during hot housing markets.
In 2021 and 2022, rents across the country reached unaffordable levels, putting significant financial strain on millions of households. According to a January report from the Joint Center for Housing Studies at Harvard University, 22.4 million renter households in 2022 reported that their housing costs were unaffordable. This marked the highest number of renters experiencing affordability issues in history. The report highlighted that half of all renters in the United States were spending over 30% of their income on rent and utilities, a significant financial burden that left little room for other expenses.
As the market began to cool in 2023, the situation improved slightly, thanks to an increase in new rental units and a slowdown in demand. However, the underlying problem of rental costs outpacing income growth remains a persistent issue. Even as the demand for rental properties decreases, rent increases continue to surpass the rate at which incomes are growing, making it difficult for many families to keep up with rising housing costs.
One factor contributing to this challenge is the high interest rates, which have led to decreased borrowing and transaction activity. A survey by the Federal Reserve revealed that more than half of the banks reported a year-over-year decline in demand for multifamily loans. This reduction in lending activity has further complicated the rental market, as fewer new properties are being developed, and existing properties remain in high demand.
The pandemic exacerbated the housing disparity across the country, creating a situation that shows no signs of abating soon. Unaffordable housing has become a pervasive issue, with both high rents and low incomes contributing to the crisis. Regardless of the primary cause, the fact remains that housing affordability is a widespread problem affecting millions of Americans.