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(The Center Square) – New Hampshire's rental housing market is tightening with a new report showing median prices continuing to skyrocket amid a lack of inventory.

The report, released by New Hampshire Housing, says the median cost of a two-bedroom apartment in the Granite State has risen to $1,584 a month – a nearly 6% increase over the previous year.

To afford the median cost of a typical two-bedroom apartment, a New Hampshire renter would have to earn 131% of the estimated statewide median renter's income, or more than $63,000 a year, according to the report.

Rents were higher than the state median in two counties along the state's southern border, the report found. In Hillsborough County, the average median rent was $1,858 in 2022, while in neighboring Rockingham County the median rental cost was $1,708.

The data was based on polling conducted by the University of New Hampshire Survey Center and a review of information on more than 21,000 market rate rental housing units across the state.

The report also points out that New Hampshire's rental vacancy rate – where the supply of rental units is meeting demand – is hovering at about 0.5%, which is well below the 5% threshold housing officials say is needed for a balanced rental market. The state's vacancy rate hasn't been at 5% since 2010, according to the report.

The report's authors said based on the low vacancy rate, "finding an apartment to rent in this market involves persistence, luck and networking."

The report's authors also looked at the financial status of renters, pointing out that the median renter occupied household income has only increased "marginally" over the past decade, as compared to increases in homeowner income. Neither index has kept pace with the increasing cost of housing in the state, the report found.

The report noted that the challenges of New Hampshire’s rental market are being exacerbated by a lack of homes available to buy, which is creating a vicious circle for potential homebuyers who are stuck in the rental market even longer.

"There is a limited supply of homes to buy in New Hampshire, particularly at a price that most first-time homebuyers can afford," the report's authors wrote. "This hinders the ability of renters to become homeowners, and keeps rental vacancy levels low because people will rent longer if they cannot purchase a home in their price range."

New Hampshire Housing’s data shows the statewide median sales price of homes was $450,000 in June 2022, an increase of 18% from the same time last year, and up 69% in the past five years, the report noted.

New Hampshire needs to build at least 20,000 more housing units to meet current demand, according to a recent report by the state's Housing Finance Authority.

In April, Gov. Chris Sununu won legislative support for a plan to spend $100 million in federal pandemic aid to create a housing fund to provide state grants to local governments, developers and property owners to build new homes.

The proposal calls for creating a $60 million matching grant program for developers to assist with the cost of building new multifamily housing projects.