Idaho’s real estate market and mortgage lending are shifting. Home prices show signs of stabilization, impacting loan sizes and lender scrutiny. Interest rates may plateau, influencing loan deals. Inventory remains tight, though improving, affecting buyer negotiation. FHA and VA loans gain popularity. Affordability remains a key challenge
Idaho’s Housing Market Is Changing—What Does It Mean for Mortgages?
If you’re thinking about buying a home or getting a mortgage in Idaho, you’ve probably noticed that the market isn’t the same as it was just a couple of years ago. Higher interest rates, shifting home prices, and unpredictable inventory have buyers, sellers, and lenders all trying to figure out what’s next. So, where is Idaho’s housing market headed in 2024? More importantly, how is it affecting mortgage lending?
Home Prices: Are They Going Up or Down?
Let’s start with the big one—home prices.
For the last few years, home prices in Idaho skyrocketed. Boise was one of the fastest-growing markets in the country, with bidding wars on almost every property. But things look different now. The rapid price hikes have slowed, and some areas are even seeing slight price drops.
What does this mean for mortgage lending?
- If prices stay high, buyers need bigger loans, which can make qualifying a challenge.
- If prices drop, lenders could tighten their approval process to reduce risk.
Either way, affordability is the biggest concern right now.
Interest Rates: Still High, But Stabilizing
Rates hit their highest levels in over 20 years, which made monthly payments way more expensive.
Now, experts say we could see rates settle down. Not necessarily dropping back to pandemic levels, but at least stabilizing.
For mortgage lending, this means:
- Borrowers may get slightly better deals.
- Refinancing could make a return if rates dip enough.
- Adjustable-rate mortgages (ARMs) might not be as necessary as they were when rates were climbing.
If you’re waiting for a huge rate drop before buying, that might not happen. But small shifts matter, so staying updated is key.
Housing Inventory: Still Tight, But Showing Signs of Easing
The biggest roadblock in Idaho’s housing market has been inventory. Simply put, there aren’t enough homes for sale.
Why?
- Homeowners don’t want to sell because they locked in low rates a few years ago.
- Builders are trying to catch up but face higher material costs.
That said, supply is improving slightly. More homes are hitting the market, which could give buyers a few more options.
For mortgage lenders, this matters because:
- More inventory means buyers have negotiating power, which can help with appraisals.
- Lenders could loosen lending requirements if the market becomes less competitive.
Still, don’t expect an oversupply of homes anytime soon.
Loan Types: What’s Popular Right Now?
With high rates and changing prices, certain loan types are getting more attention.
- FHA Loans – Lower down payments and more flexible requirements make FHA loans attractive to first-time buyers.
- VA Loans – Military buyers are leaning on VA loans because of zero down payment options.
- Adjustable-Rate Mortgages (ARMs) – Some buyers went for ARMs when rates were climbing, but with potential stabilization, fixed-rate loans are making a comeback.
Knowing what loan options are available can help buyers and lenders make smarter decisions.
FAQs
Is now a good time to buy in Idaho?
It depends. If prices ease and rates stabilize, it could be a good opportunity. But if affordability remains an issue, waiting might make sense.
What’s the biggest challenge in Idaho’s market?
Affordability. Prices are still high, and rates add pressure to monthly payments.
Are home values expected to drop?
Some areas might see small declines, but a full collapse isn’t likely.
How can I get the best mortgage rate?
Improve your credit score, save for a larger down payment, and shop around with multiple lenders.
Conclusion
Idaho’s housing market is navigating a period of significant change. While home prices show signs of stabilization and interest rates may plateau, affordability remains a key concern. Inventory is slowly improving, offering more options, and loan types like FHA and VA loans are gaining traction. Buyers and lenders must remain adaptable, closely monitoring market trends to make informed decisions.