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ew Hampshire's residential real estate market is experiencing an all-time high median price of $565,000 for a single-family house. Lower interest rates could provide some relief, but experts caution that this isn't a guarantee. President Donald Trump and his administration are advocating for lower rates to boost the economy.

    Susan Cole, president of the New Hampshire Association of Realtors, notes that the Federal Reserve's decision to lower interest rates doesn't automatically translate to lower mortgage rates. In fact, the last time the Fed cut rates, mortgage rates actually increased. However, she acknowledges that lower interest rates will have an indirect influence on mortgage rates over the long term.

    The pressure on the Fed comes as the state faces a housing supply and affordability crisis, with a median priced house now surpassing $565,000. The current average mortgage interest rate in New Hampshire is around 6.75% for a 30-year fixed mortgage and 5.75% for a 15-year fixed mortgage.

    Mortgage rates are a key factor in the affordability of a home. For example, with a median priced house of $565,000 and an average current rate of 6.75%, the monthly payment would be around $2,931.66, not including insurance and property taxes. A 1.5 point reduction in the interest rate to 5.25% would save homeowners around $435 per month.

    Cole points out that low inventory continues to drive up prices, with only 2,431 single-family residential units on the market at the end of June, a 66% decline from October 2016 when the market was balanced. The National Association of Realtors predicts mortgage rates will average 6.4% in the second half of 2025 and 6.1% in 2026.

    Lower mortgage rates can also bring more buyers into the market, potentially pushing prices higher in some areas. Current homeowners with locked-in rates from the COVID era may be hesitant to give up their existing low mortgage rate for a higher one. However, as those low-rate mortgages expire and new listings become available, it could contribute to more inventory and affordable housing options.

    National associations have made predictions about where mortgage rates will go in the months ahead. Eric Lynch of the National Association of Home Builders anticipates an average 30-year mortgage rate around 6% by the end of 2025 and just above 6% by the end of 2026, while Lawrence Yun of the National Association of Realtors suggests that mortgage rates can go down with a Fed rate cut if inflation is under control.