Housing in NH, Pt 3: The Evolving Environment
Date: April 23rd, 2014
This paper, the last in a three-part series, presents a current assessment of housing markets in New Hampshire and a forecast for housing production over the next ten years. The goal is to understand how demand for housing in New Hampshire is going to change, and how well the underlying supply will meet that demand. In addition, how these changes will affect housing affordability, both now and in the future was examined.
Current New Hampshire housing production is lower than it has been historically, and future housing construction need is projected to grow at 5,000 units per year through 2025. This is about half the rate as in the last housing production forecast. This change in production need, in response to decreased demand in the marketplace, means that housing production may be less of a source of economic growth in the future, and that public policy should be adjusted to reflect this change.
Demand for housing of a particular type is going to change considerably in the future. This could imply a shift away from new construction to rehabilitation of the existing housing stock. These changes could, in turn, imply needed changes to housing regulation, including local planning and zoning ordinances.
Nationally, some have argued that the age of suburbanization and growing homeownership is over. This change in prior housing demand will be fueled by growth in two-person households, the changing preferences of Baby Boomers, Generation Y preference changes, and the decline in the ability of younger Baby Boomers to purchase second homes. If true, then New Hampshire will be affected by these changes as well, in part because New Hampshire has a higher than average share of Baby Boomers compared to many other states.