Connecticut Housing Market 2024: Trends and Insights
As we move through 2024, Connecticut’s housing market continues to present both opportunities and challenges. Several recent reports highlight the ongoing issues of rising housing costs, constrained supply, and legislative hurdles impacting the real estate landscape.
Rising Housing Prices and Market Trends
House prices in Connecticut increased nearly 10% year-over-year in the first quarter of 2024, with a 9.64% rise from the first quarter of 2023. This outpaces the national average increase of 6.6%, placing Connecticut among the top states for price appreciation. According to the Federal Housing Finance Agency, Connecticut saw the seventh-highest increase in housing prices in the nation. The median sales price for May is $440,000 statewide.
Steve Schappert, manager at Connecticut Real Estate Brokerage LLC, states, “We are seeing unprecedented price increases across the state, driven by a combination of high demand and limited supply. This trend shows no signs of slowing down.”
Challenges in Affordable Housing
Connecticut’s affordable housing crisis is worsening. Reports from Consumer Affairs rank Connecticut as the worst state for renters, citing high costs and low availability. The state’s vacancy rate is 3.5%, roughly half the national average of 6.6%, making it difficult for renters to find affordable housing.
“Connecticut’s housing market is under significant strain,” Schappert notes. “With such a low vacancy rate, renters are facing fierce competition for available units, driving prices even higher.”
Insufficient Housing Supply
The Connecticut Economic Digest reports a significant drop in new home construction permits. The number of permits issued peaked in 2004 but has not recovered since the Great Recession. Barely over 1,000 new permits were issued in the first quarter of this year.
Steve Schappert emphasizes, “The lack of new construction is a critical issue. We need to increase our housing stock to meet the growing demand and stabilize prices.”
Market Activity and Mortgage Rates
In Connecticut, both new and sold listings are down about 26% year-to-date. Current mortgage rates and inflation continue to create home affordability issues, keeping many buyers on the sidelines. Mortgage interest rates for a 30-year conventional product range between 7 to 7.25%.
“Sales are taking place, but with the problem of low inventory, an increase in sales volume is unlikely,” says David Gallitto, past president of CT Realtors and an agent with Compass Realty Corporation.
Zoning and Legislative Challenges
Experts like Lauren Tagliatela, co-chair of the government relations committee for the Connecticut Apartment Association, point to restrictive zoning as a significant barrier to increasing housing supply. She advocates for building multi-family homes and accessory dwelling units to address the crisis.
“Connecticut’s zoning laws are some of the most restrictive in the nation,” says Schappert. “Reforming these laws is essential to facilitate the construction of more affordable housing options.”
Efforts to address the housing crisis through legislation have faced significant challenges. House Bill 5390 (the Work Live Ride bill) and Senate Bill 143, aimed at expanding renter protections, failed to pass in the General Assembly.
“There is a clear need for political will to drive meaningful change,” Schappert asserts. “We need our leaders to take bold actions to solve the housing crisis and ensure that all Connecticut residents have access to affordable housing.”
Current Market Statistics
Here is a snapshot of transaction volume and selling prices for all eight Connecticut counties for the second quarter of 2023:
| County | New Listings | Properties Sold | Median Sold Price | Median Days On Market |
|---|---|---|---|---|
| Fairfield | 3,668 (-32%) | 2,628 (-25%) | $650,000 (+4%) | 22 days (-8.33%) |
| Hartford | 2,840 (-28%) | 2,152 (-28%) | $325,000 (+8.33%) | 5 days (unchanged) |
| Litchfield | 811 (-27%) | 508 (-30%) | $350,000 (+13%) | 18 days (-25%) |
| Middlesex | 670 (-28%) | 468 (-26%) | $366,000 (+7.66%) | 7 days (unchanged) |
| New Haven | 2,733 (-28%) | 2,049 (-26%) | $330,000 (+6.11%) | 11 days (+22%) |
| New London | 1,029 (-28%) | 765 (-23%) | $328,000 (+6.08%) | 6 days (unchanged) |
| Tolland | 497 (-36%) | 354 (-29%) | $340,000 (+10%) | 6 days (+20%) |
| Windham | 386 (-34%) | 277 (-35%) | $325,000 (+10%) | 7 days (+17%) |
Connecticut Housing Market Predictions
Looking ahead, the market is expected to remain challenging for both buyers and renters. Inventory levels are likely to stay low, maintaining upward pressure on prices.
“Housing is a regional need that requires a coordinated effort from all levels of government,” concludes Schappert. “At Connecticut Real Estate Brokerage LLC, we are committed to advocating for solutions that will increase housing availability and affordability.”
Contact Us
For more information or to discuss your real estate needs, contact Connecticut Real Estate Brokerage LLC today. Our team is here to help you navigate the complex market and achieve your real estate goals. 203-994-3950
Let’s work together to find the right solutions and turn your real estate dreams into reality.