We Know Boise Real Estate

Boise Market Springs Early: Lower Mortgage Rates Spark Early Buyer Interest

Posted by Lisa Kohl on Tuesday, January 9th, 2024 at 5:37pm

Falling mortgage rates spark early buyer interest in the Boise housing market.

Yearly price gains, falling inventory, and plunging mortgage rates are combining to create a favorable market for Treasure Valley home sellers in 2024.

Presently, there are 1,915 homes for sale in Treasure Valley, representing a 21% decrease from last year. Given the current sales pace, the market has less than a two-month supply of homes, creating an imbalance that will intensify competition among buyers.

New listings tend to jump in April as move-up buyers enter the market. However, as supply usually reaches its lowest point in February, inventory will continue tightening, at least for the next month or two.

The Boise metro area remains a popular relocation destination, attracting out-of-state buyers, who account for as many as one in five home sales in Ada County. This trend, driven by Boise's booming job market and its popularity among retirees, adds demand without a corresponding increase in housing supply, further constricting the market.

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Mortgage rates have fluctuated considerably over the past year. Each time rates have dropped, there has been a corresponding uptick in housing demand. After reaching a two-decade high of 7.79% in October, 30-year mortgage rates fell to 6.62% last week.

The sharp drop in December's interest rates could signal an early surge in this year's spring housing market. Typically, demand increases in March, but the recent rate decline has already boosted buyer interest, potentially leading to an earlier spike in homebuying. Consequently, low-priced homes are already attracting multiple offers.

Local home prices have risen steadily since hitting a two-year low last spring. November saw the first year-over-year price gain since late 2022. In December, yearly increases continued, with Ada County home prices rising by 0.3%. The city of Boise, and Canyon County saw 5.1% increases.

Over the last decade, the construction of new homes has failed to meet the growing demand. This challenge was further compounded during the post-pandemic period. Record-low interest rates during this time prompted many to purchase homes earlier than planned, effectively increasing demand (at the expense of future sales).

Moreover, as 2023 saw a rise in interest rates, many existing homeowners with below-market mortgage rates became reluctant to move, exacerbating the already limited supply. The combination of low inventory and elevated interest rates depressed home sales in the Treasure Valley to their lowest level since 2014.

Typically, available listings are mostly pre-existing homes with mortgages. However, in 2023, with fewer move-up buyers, much of the market consisted of purchasers without current loans. In Ada County, nearly 28% of all transactions last month were cash sales, up from 24% the previous year. Nationally, sales to first-time buyers have risen to 31%.

December's sales data reflects purchase decisions made in October and November, when rates were much higher than now. With such low supply, any increase in buyer demand due to falling mortgage rates could significantly drive up home prices in the first quarter.

When inventory and rates fall, prices tend to rise, creating an ideal market for sellers.


One year chart of Treasure Valley median home prices by month - Ada County, Canyon County, and Boise, ID

Boise Real Estate Market Summary for December 2023

  • Median list price: $510,000, up $10,100 (2%)
  • Median sold price: $510,000, up $25,000 (5.1%)
  • Average price per square foot: $295 (8.1%)
  • Total home sales: 191 (down 47)
  • Median days on market: 32 days (up 7)
  • Available homes for sale: 1.32 month supply (down 0.18)
  • 30-year mortgage rate: 6.81% (up 0.45)

Treasure Valley Housing Market by Area

  • Ada County: $516,745, up $1,745 (0.3%)
  • Eagle: $929,450, up $149,450 (19.2%)
  • Garden City: $545,000, up $137,500 (33.7%)
  • Kuna: $450,000, down $38,088 (-7.8%)
  • Meridian: $484,990, down $5,010 (-1%)
  • Star: $515,000, down $64,510 (-11.1%)
  • Canyon County: $410,000, up $20,000 (5.1%)
  • Caldwell: $364,990, up $13,707 (3.9%)
  • Middleton: $429,050, down $157,050 (-26.8%)
  • Nampa: $419,990, up $20,495 (5.1%)

Boise Real Estate Agent Lisa Kohl

Lisa Kohl

Lisa carefully studies the local housing market to give her clients the edge when buying or selling a home in Idaho. We Know Boise is a full-service real estate team that combines our LOCAL expertise with traditional know-how to create exceptional results for each of our clients.

Email Lisa

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Select information in this We Know Boise market report was obtained from the Intermountain MLS (IMLS) on January 8th, 2024, and is deemed reliable but not guaranteed. City data refers to single-family homes on less than one acre, while county data includes homesites of all sizes. Months of supply is calculated on a 12-month rolling average. Combining existing homes for sale with new construction is the best way to gauge current home prices and Boise housing market trends. New house prices can be more volatile and can make comparisons, particularly on a month-to-month basis, less reliable.

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