New Hampshire economy is healthy and strong

By Norma Love
Associated Press

CONCORD - New Hampshire’s economy should continue to outpace that of other New England states and slightly exceed the national average, but not grow at booming, pre-recession rates, three forecasters told a Senate committee Wednesday.

The Senate Ways and Means Committee sought the advice to help it decide how much the state will have to spend for the two years beginning July 1.

Ross Gittell, professor at the Whittemore School of Business and Economics at the University of New Hampshire, said the state’s job growth continues to reflect its resiliency and will be reflected in moderate increases in business tax receipts during the next two years.

"The economy is much stronger than it has been in the last few years," he said.

Gittell, Russ Thibeault of Applied Economic Research in Laconia and Daniel Devine, a vice president with the Federal Home Loan Bank of Boston, all said housing prices will increase at a slower rate as the market cools.

Devine noted that home prices have risen an average 13 percent annually since 2000.

No one predicted a drop in home prices as was experienced in the 1980s when prices were inflated by speculation.

"There’s not a bubble" to burst, said Gittell.

Thibeault said rising interest rates could cut into home buyers’ ability to afford the pricier houses, which in turn would affect the amount of taxes the state collects on sales. Buyers and sellers pay a tax on property sales based on the value of the property.

"I’m surprised mortgage rates aren’t higher than they are now," he said.

Devine said rising incomes should help keep housing affordable if interest rates rise.

"To summarize, we’re in pretty good shape," said Ways and Means Chairman Lou D’Allesandro. "We don’t expect the bubble to burst."

D’Allesandro said the committee probably will prepare its revenue estimate next week.


	By Norma Love Associated Press CONCORD - New Hampshire’s economy should continue to outpace that of other New England states and slightly exceed the national average, but not grow at booming, pre-recession rates, three forecasters told a Senate committee Wednesday. The Senate Ways and Means Committee sought the advice to help it decide how much the state will have to spend for the two years beginning July 1. Ross Gittell, professor at the Whittemore School of Business and Economics at the University of New Hampshire, said the state’s job growth continues to reflect its resiliency and will be reflected in moderate increases in business tax receipts during the next two years. "The economy is much stronger than it has been in the last few years," he said. Gittell, Russ Thibeault of Applied Economic Research in Laconia and Daniel Devine, a vice president with the Federal Home Loan Bank of Boston, all said housing prices will increase at a slower rate as the market cools. Devine noted that home prices have risen an average 13 percent annually since 2000. No one predicted a drop in home prices as was experienced in the 1980s when prices were inflated by speculation. "There’s not a bubble" to burst, said Gittell. Thibeault said rising interest rates could cut into home buyers’ ability to afford the pricier houses, which in turn would affect the amount of taxes the state collects on sales. Buyers and sellers pay a tax on property sales based on the value of the property. "I’m surprised mortgage rates aren’t higher than they are now," he said. Devine said rising incomes should help keep housing affordable if interest rates rise. "To summarize, we’re in pretty good shape," said Ways and Means Chairman Lou D’Allesandro. "We don’t expect the bubble to burst." D’Allesandro said the committee probably will prepare its revenue estimate next week.