A new house under construction on Dylan Drive in Scarborough in October 2023. Derek Davis/Portland Press Herald, file

Construction of affordable housing in Maine is expected to rise this year, and while the cost of building remains high, it is starting to level off, the state’s housing authority reported Wednesday.

It also warned that higher home prices could continue to limit access to home ownership while renters, too, face a budget squeeze.

In the “first edition of what is intended to be an annual summary of the state of the housing and housing-related issues in Maine,” MaineHousing showed a mixed picture of statistics and trends affecting the state’s economy, industry, homebuyers and homeless people. The scope of the report is broader than others the agency has released and incorporates more national context.

Inflation and growth in wages and employment — economic indicators that are the basis for industrial activity — are “expected to be consistent with stable economic growth in the coming years,” the 19-page report said. Construction employment in the state grew by 7.3% between 2023 and 2024 and new housing starts in the northeastern states sharply increased between July 1 and Sept. 30, 2024, exceeding recent quarterly averages by nearly 50%.

The per-unit development costs related to MaineHousing-financed units more than doubled from $150,000 to over than $300,000 between 2019 and 2024, though data from last year could change.

Home buyers face daunting financial challenges. Rising home prices “continue to be a primary concern for homeownership access in Maine,” the report said. From 2020 to 2024, the median home price in Maine grew by more than 50% while Mainers’ wages and salaries grew by less than 33.3%, it said.

The Maine Association of Realtors reported in January that the annual median sale price of a home in Maine was $390,200 in 2024, up a little over 8% from the 2023 median — and previous record — of $360,000. The median is the price at which half of the homes sell for more and half sell for less.

Citing Census data, MaineHousing said that from 2020 through 2023, the median home price in Maine increased by 43.5%, while the U.S. median price increased 39.1%.

Financial burdens weigh heavily on renters, too. The proportion of households in the $20,000-$34,999 income range that spent more than 30% of their income on housing — considered “cost burdened” — increased to about 80% in 2023 from about 65% in 2013. The increase was even greater for those in the income range of $35,000 and $49,999 — more than half were cost burdened in 2023, up from 30% 10 years earlier.

The picture was brighter for home construction. MaineHousing said it completed 775 affordable housing units in 2024 and another 1,005 units are in progress, with 727 expected to be completed this year. But MaineHousing’s average cost per unit increased in 2024 for a third consecutive, though currently financed projects indicate that costs are “leveling off.”

And foreclosures have fallen. Since July 2022, a monthly average of 1,225 notices of default were issued in Maine, 40% lower than the monthly average before the COVID-19 pandemic, according to MaineHousing.

In addition, evictions are down, with annual statewide eviction filings falling to 4,290 in 2024, from 5,977 in 2023, a 28% drop. It was the first year that fewer evictions were served since the eviction moratorium in 2020.

Although the average length of stay in homeless shelters increased to 11.6 days in 2024, up 38% from the previous year, the average number of people who reentered the homeless services system fell 43% after having exited to a permanent housing solution less than 12 months earlier. The number of people in shelters, unsheltered and in transitional housing increased to more than 2,300 last year, from fewer than 1,700.

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