It seems like it’s every week that there’s some new concerning statistic about the New Hampshire housing market.
This time it comes from CoreLogic’s U.S. Home Price Insights. At 9.4%, New Hampshire saw the highest home price growth in the country from August 2022 to August 2023.
The top 10 states with the highest year-over-year increases in their home prices include four other New England states. The rest of the top 10 are Maine (8.9%), Vermont (8.9%), Rhode Island (8.4%), New Jersey (8.1%), Connecticut (8.1%), Wisconsin (7.0%), Missouri (6.7%), Indiana (6.6%), and Ohio (6.0%).
Nationally, from August 2022 to August 2023, home prices rose by 3.7%, which means that New Hampshire home prices increased by more than double the national average so far this year.
Not every state saw a jump in home prices over the last year. States like Arizona, Idaho, Montana, Nevada, New York, Texas, Utah, and Washington saw some of the largest year-over-year drops in their home prices.
Many states in the Western U.S.—the three states along the Pacific Coast, as well as all Mountain states but New Mexico—saw annual declines in home prices.
Is this a coincidence? Hardly.
Several of those states happen to be building the most homes. According to an analysis of U.S. Census data by RubyHome Luxury Real Estate, Texas (22.5%), Utah (20.65%), Idaho (20%), Nevada (16.74%), and Colorado (16.30%) all rank among the top 10 states with the highest rate of new homes built (as a percent of their total housing stock) from 2010 to 2022.
Another analysis of U.S. Census data by Construction Coverage found similar results. By new housing units authorized per 1,000 existing homes, Mountain West states like Utah (26.7), Idaho (24.2), Arizona (19.4), Colorado (19.2), Nevada (15.3), and Washington (15.1), as well as Southern states like Texas (22.2) and Florida (21.1), were among the top builders of new housing in 2022.
This spring, Montana’s legislature passed a slate of zoning reform bills to speed up home construction.
Towards the bottom of the list are many of those states that experienced the highest year-over-year increases in their home prices, including New Hampshire. At 7.4 new housing units authorized per 1,000 existing homes, the Granite State ranked 38th in housing development in 2022.
Similarly, Rhode Island (2.8), Connecticut (3.7), Ohio (5.9), Vermont (6.8), Missouri (7.5), and Wisconsin (7.7) all ranked in the bottom half, while Maine (9.5), Indiana (9.6), and New Jersey (9.8) were middle of the road.
The U.S. Census Bureau’s Building Permits Survey (BPS) tracks the number of new privately owned housing units authorized by state each year. Before 2022, Arizona and Utah each saw 11 consecutive year-over-year increases in the number of housing units authorized, and Idaho saw 10. In total, Colorado, Texas, and Washington each had 10 year-over-year increases in the number of units authorized.
New Hampshire, meanwhile, saw seven total year-over-year increases in units authorized, the longest consecutive stretch being the four increases from 2012 to 2016.
New home construction is one of many different factors that play a role in determining home prices. But at a minimum, there’s a strong correlation between states that have higher rates of home building and states that have seen recent drops in their home prices (or relatively minor increases compared to many states in the Northeast).
As we’ve shown, New Hampshire municipalities have made housing development very difficult with onerous land-use regulations that restrict supply and inflate home prices.
If Granite Staters want lower home prices, we can follow the lead of many Western states and build, baby, build!