HUD Quarterly Report
Quarter 4, 2021
HUD released its 4th Quarter PD&R Regional Report for New England, which reports on market conditions related to home sales and apartments in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont. Items of note included the following:
Economic Conditions
Nonfarm payrolls increased 5.7 percent (approximately 389,600 jobs) compared to the national rate of 4.6 percent. This increase is significant from pre-pandemic job growth in the region, which averaged only 0.9 percent. The New England region had the second-fastest job growth rate out of all ten regions, falling short to just the Pacific. The unemployment rate averaged 5.2 percent, which is in line with the national rate of 5.2 percent and shows much improvement from the 8.8 percent unemployment rate for the same period in 2020.
Sales Market Conditions
The housing sales market conditions in New England continue to be tight due to record-low mortgage interest rates and a decline in the number of homes for sale. This past quarter, the national average interest rate for a 30-year fixed-rate mortgage was 2.8 percent, down from 2.9 percent for the same period in 2020 and 4.4 percent in 2010. Despite low housing inventory, there is still a high volume of homes sold and rising sales prices in all six states. In the last 12-month period, average home sales prices rose 15 percent ($480,000), compared to a 5 percent increase the previous year.
Apartment Market Conditions
Apartment vacancy rates declined for most areas in New England during the third quarter of 2021. Vacancy rates for all eight of the major metropolitan areas in the region were below the national rate of 2.8 percent. Multifamily building activity (as measured by units permitted) declined in five of the six states in the region for a total decrease of 9 percent (approximately 330 units) from the previous year. Massachusetts was the only state with an increase in multifamily permitting of 21 percent (about 580 units).
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