A thriving mountain town has defied a nationwide housing slowdown as experts say the market is “immune” to sky-high mortgage rates.
Home prices in Boise, Idaho, skyrocketed after homebuyers flocked to the state during the pandemic, and surprisingly, the region has managed to hold on to those gains, figures show.
While there are “many reasons contributing” to the stable housing market in the picturesque town, Andrea Pettitt of Silvercreek Realty Group told DailyMail.com that homebuyers have been pleased with the “fairly steady price appreciation” over the past few years.
Although there is low housing inventory in the state capital, new buyers and others who have been watching prices are entering the market there.
“Buyers are happy to see homes come on the market…and not experience dramatic appreciation,” Pettitt said.
Home prices in Boise, Idaho, have stagnated nearly a year after prices skyrocketed as homebuyers flocked to the Gem State during the pandemic.
Although many people have moved to Boise during the COVID-19 pandemic, Pettitt said a “large portion” of retirees and even early retirees have been heading to the city.
He added that Boise has low unemployment rates, tech startups setting up shop and an abundance of restaurants, health care, retail and entertainment venues, all of which attract newcomers and locals alike.
The real estate agent, who has been in the business for 22 years, said most people have moved there from California, Texas and Washington state.
Pettitt believes this steady price trend will last into the fall and even spring of 2025, creating “continuous growth” in the city.
Matthew Walsh, an economist at Moody’s Analytics, told DailyMail.com that Boise home prices “are down about seven percent from their peak in 2022.”
Walsh added that Boise is the second most overvalued city in the country.
Matthew Walsh of Mood Analytics told DailyMail.com that Boise home prices are “down about seven percent from their peak in 2022.” (Pictured: A home for sale in Boise)
Americans flocked to rural states like Idaho during the pandemic as a widespread shift to working from home freed up employees in big cities like New York and San Francisco.
At the time, property prices were so low that buyers rushed to snap them up. And Idaho’s picturesque landscapes also provided cooped-up Americans with a much-needed respite from the inside of their homes.
U.S. Census data showed Idaho was the second-fastest-growing state last year, after seeing its population grow 1.8 percent.
In turn, rising demand pushed up prices. A 2022 study by the Idaho Department of Labor noted that the median value of a single-family home had soared by about 173 percent compared to 2011.
Potential homebuyers are facing the toughest housing markets in living memory thanks to rising mortgage rates, fueled by aggressive interest rate hikes from the Federal Reserve.
Although many people have moved to Boise during the COVID-19 pandemic, Pettit said a “large portion” of retirees and even early retirees have been heading to the city.
The average rate on a 30-year home loan is 6.35 percent, according to figures from government-backed lender Freddie Mac.
This means buyers face paying about $1,000 more per month for a home than they would have paid if they had purchased it in August 2021, when rates were around 2.87 percent.
Rising rates have effectively frozen the US housing market as millions of homeowners are reluctant to give up cheap mortgages they signed up for when rates were at record lows.
This has led to speculation that the housing market could soon collapse due to weakening demand.
According to the Federal Housing Finance Agency, property prices fell by 0.1 percent month-on-month in May.