By PHIL SLETTEN, NHFPI
From rising housing, child care, and health care costs to a labor force with many workers reaching retirement age, New Hampshire faces some big challenges heading into 2027. For many Granite Staters, the growing cost of living makes it increasingly difficult to afford the basics, pay monthly bills, and save for the future.
As lawmakers prepare for the upcoming legislative session, they have an opportunity to address these challenges and improve residents’ lives and livelihoods. With limited State resources and competing priorities, the decisions ahead may not be easy.
Overall Inflation Faster in the Northeast
Prices increased nearly 26% between 2019 and 2025 in the Northeastern United States. In September 2026, overall consumer prices were 4.2% higher than a year earlier, compared with 3.7% nationally. Energy costs have been a significant factor, with gasoline prices in the Northeast rising 37% over the year and home heating fuel oil prices increasing 74% nationally.
Cost of Paying for the Median-Priced House Surges 160% in Ten Years
Housing costs have risen even faster. The median sale price for a single-family house statewide increased 114% between 2015 and 2025. Accounting for mortgage rates, property taxes, and a 5% down payment, the monthly cost of a median-priced house surged 160%, from approximately $1,500 to about $3,900. A full-time worker would have needed to earn approximately $75 an hour to afford that house without spending more than 30% of income on housing. Renters have also faced rising costs, with median rent and utilities for a two-bedroom apartment increasing by 58% from 2015 to 2024, faster than inflation and income growth.
Price of Child Care Rises to Nearly a Quarter of Median Income for a Family with Young Children
For families with young children, child care can be the second-largest expense after housing. The average cost of care for an infant and four-year-old was about $30,000 annually during the 2022–2025 period, equivalent to 24% of median income for a married couple with two or more children under age 5. That is substantially above the federal affordability benchmark of 7%. While the expanded New Hampshire Child Care Scholarship Program is helping more families, thousands of eligible households remain unreached, and providers continue to face financial pressures and limited capacity.
Out-of-Pocket Health Care Costs for Families Increasing
Health care is another growing expense. Out-of-pocket health care costs reported by consumers in the Northeast increased by 44% from the 2014–2015 average to the 2023–2024 average. In New Hampshire, the average family deductible in an employer-sponsored health insurance plan increased by 323% between 2005 and 2024, while the average employee contribution to family premiums rose by 116%, reaching approximately $6,220 in 2024.
Average Private-Sector Wage Lost 2.2% of Purchasing Power in 2025, Still Behind in 2026
Granite Staters would be more able to absorb these rising costs if incomes were keeping pace. However, New Hampshire’s inflation-adjusted median household income in 2025 was statistically unchanged from 2021. The average private-sector wage fell behind inflation in 2022, 2024, 2025, and the first nine months of 2026, with purchasing power dropping 2.2% in 2025 alone.
More Than 200,000 Granite Staters Near Retirement Ages
The age composition of the state’s population could also spur economic changes. Approximately 206,000 Granite Staters could reach traditional retirement ages within the next ten years. With New Hampshire relying on in-migration for all population growth since 2017, helping ensure that workers and families can afford to live here will be increasingly important to the state’s economic future.
Fiscal Constraints and State Budget Opportunities
Addressing these challenges could require difficult decisions, particularly as lawmakers develop the next State Budget.
The current budget required approximately $113 million in unspecified reductions and other savings, lowered funding for several key services, and raised 125 fees and fines. New Hampshire also continues to face significant potential costs. Compliance with a July 2025 Supreme Court ruling could increase State spending on local public education by about $448 million in the first year if the court’s suggested minimum were implemented without other changes. Separately, settlements for alleged abuse at the Youth Development Center had reached $239.3 million by August 2026, with 1,684 claims still pending and the potential for more court-ordered payments.
Recent State revenues are ahead of expectations, potentially giving policymakers more fiscal space than during negotiations over the current budget. However, reductions to the State’s two primary business tax rates and repeal of the Interest and Dividends Tax reduced revenue by an estimated $500 million to $800 million during the current budget cycle.
The challenges facing New Hampshire are significant, but so are the opportunities to address them. The decisions lawmakers make in 2027 about how to raise and invest public dollars will have consequences well beyond the next two-year budget. These decisions could help shape whether Granite Staters can afford to live, work, raise families, and retire in the communities they call home. With thoughtful, data-informed choices and a clear understanding of the challenges facing residents, policymakers could make meaningful progress toward a more affordable and prosperous New Hampshire for Granite Staters.
Phil Sletten is Research Director at the New Hampshire Fiscal Policy Institute, a nonpartisan, independent research nonprofit that examines issues related to the State budget, the economy, policy decisions, and the financial security of Granite Staters. Learn more at NHFPI.org.