The dire state of New Hampshire’s housing shortage is illustrated in the New Hampshire Housing Finance Authority’s just-released spring Housing Market Snapshot. 

The median home price in New Hampshire hit $362,000 in April, up 16% from last April’s median price of $313,000. 

Last April’s housing snapshot showed that in March of 2019, the median was just $275,000. In just two years, the state’s median home price has jumped by $87,000.

Migration caused by the COVID-19 pandemic is not the primary cause of this increase. The report shows a roughly 5% increase in home buyers from Massachusetts and a much smaller bump in buyers from other states in 2020. 

The real culprit is supply. 

The number of new building permits issued in New Hampshire collapsed in the five years from 2004 to 2009 and has not recovered. In 2004, more than 500 permits for single-family homes and more than 200 permits for multi-family housing were issued in the state. By 2009, barely more than 100 single-family home permits were issued, and multi-family permits were in the low double digits.

Since 2009, the number of issued permits has climbed slowly but has not come close to its early 2000s levels. A little more than half as many permits are being issued annually than in the early years of this century. 

One way to think about the numbers is that builders were constructing hundreds more homes each year in New Hampshire when the hit TV show “Friends” ended its run than when “The Big Bang Theory” ended its run. 

Fewer homes being built means fewer homes on the market. There were more than 8,000 homes for sale in the state in May of 2018. This May, there were 4,613. 

Last spring, there was a 1.6 month supply of homes on the market, including a 1.1 month supply of homes priced less than $300,000. 

This spring, the overall supply has fallen to 0.6 months and the supply of homes priced less than $300,000 is down to 0.4 months. 

The only way out of this housing shortage is to build more homes.