Boise Rental Market & Vacancy Rates
The average rent in Boise, ID is $1,679 per month. Boise rents have increased by 11.04% over the past year and 25.86% over the past three years. The vacancy rate for all rental properties in Boise is 1.40%, down from 4.27% one year ago.
Average Rents in Boise
In Boise, the average monthly rent for all property types in the first quarter of 2021 is $1,679. Rents rose $167, or 11.04 percent from the year prior, and are now slightly above the Boise area's record high set in the first quarter of 2021.
On a per-month basis, the average house rent in Boise is $1,920. That is an increase of $217 (12.74 percent) from the previous year. Single-family rents rose $177 from the previous record high of $1,743 we saw just last quarter.
Rents for two, three and four-bedroom houses hit new record highs in the quarter. Two-bedroom units rose $137 (10.50 percent) to $1,442, three-bedroom units rose $270 (16.23 percent) to $1,934 per month, and properties with four-bedroom rose $246 (11.50 percent) to $2,385 per month.
Five-bedroom house monthly rental rates increased $82 (3.79 percent) to $2,244 per month but are still below the record highs we saw in the first quarter of 2020.
The average apartment rent in Boise is $1,248, a new record and an increase of $142 (12.84 percent) from the prior year. Multifamily rents rose $129 from last quarter.
Boise two and three-bedroom multifamily units increased in price by $168 (15.54 percent) and $206 (14.69 percent) per month, respectively, both hitting new record highs.
One-bedroom rentals rose $54 (6.47 percent) but are still slightly below the record highs set in the third quarter of 2020.
Boise Rental Vacancy Rates
The average Boise rental market vacancy rate for all property types declined to 1.40 percent from 4.27 percent twelve months ago.
Single-family investment property vacancies declined to 1.93 percent from 4.08 percent the year prior. Apartment vacancy rates fell to 1.16 percent from 4.37 percent.
After falling sharply to a five-year low in the second half of 2019, vacancy rates rose steadily throughout the first three quarters of 2020. Then in the fourth quarter of 2020, combined single and multifamily vacancy rates plunged to the lowest level on record before falling further to new records in the first quarter of this year.
Residential Investment Property Summary and Outlook
Pandemic-driven demand for rentals is pushing vacancies to record lows throughout the Boise metro area.
Boise's significant population growth over the past ten years was only accelerated as COVID-19 gripped the country at the beginning of 2020.
People are fleeing overpriced and overcrowded coastal cities as work-from-home flexibility has become a reality for many.
Limited inventory and increased demand have caused local home values to surge to new records.
Despite average rents increasing 26% over the past three years, strong house price appreciation in the purchase market continues to keep renting, at least somewhat, affordable by comparison.
The shortage of properties in the purchase market is driving potential buyers to the rental market.
At the end of 2020, single-family vacancies declined to 1.5%, down from 2.95% the year prior. Multifamily vacancies fell to a record low of 0.69% from 2.32% in 2019.
When vacancy rates rose above 4% in the second quarter of 2020, it appeared to us to be more a reflection of the reluctance of renters to move during a pandemic than inherent weakness in the rental market. The first quarter of 2021 has made it vividly clear – demand for rentals is almost literally off the charts.
Both single-family and multifamily rents are at or near all-time highs. At the beginning of 2021, we saw the most popular unit types for each, three-bedroom houses and two-bedroom apartments, jump to new records of $1,934 and $1,249, respectively.
Still, recent rent price records are more of a reflection of demand than aggressive price increases by landlords. At the beginning of 2021, by our calculations, more properties may be below market rates than at any other time in the last three years. However, a new round of rental increases in the first half of 2021 is beginning to close the gap (albeit only slightly).
Property owners had initially been reticent to raise rental rates as the pandemic set in and were slow to catch up.
While record-low vacancy rates may have been brought on by a confluence of events that are not likely to repeat themselves, market forces will continue to keep vacancies below their long-term averages (and rental rates high) for the foreseeable future.
Note: Historical market vacancy rates average 5% to 6% for both single and multifamily rentals.
The median home price in Boise, ID (metro) is $506,089. In the first quarter of 2021, the median sales price for duplexes was $550,000, $775,000 for fourplexes, and $1,100,000 for apartment buildings (defined as five or more units).
Rents at 30% or below household income are typically considered affordable. In fact, many property management companies require a minimum income of at least two and a half to three times the asking rent. Based on U.S. Census data, the median household income in Ada County is $66,293, equating to rents of $1,657 per month.
Multifamily Market Report - Supply
While there are no signs of a drop in demand for multifamily units from potential renters, we continue to see a steady stream of new supply, albeit at higher monthly rents.
Apartment Projects Under Construction in 2020*
- Boise = 622 units
- Meridian = 634 units
- Eagle = 0 units
- Garden City = 29 units
- Nampa = 556 units
- Kuna = 12 units
- Star = 0 units
- Caldwell = 194 units
- Total = 2,047
Building Permits Issued for Multifamily Units by County
Boise Rental Units by Structure Type
Keep in mind that the Boise area still has fewer apartment buildings than a typical metro area this size. Single unit properties, primarily houses, make up more than half of the Boise rental market.
Boise Residential Income Property Capitalization Rates
Capitalization Rate, also known as "Cap Rate," is a good starting point to compare Boise investment opportunities quickly. Many more factors need to be considered, such as the growth or decline of the potential income and the increase (appreciation) in the value of the property.
Capitalization Rate = Yearly Net Income/Total Value
Speak to a Boise Income Property Expert. Contact Us or submit the form below – we look forward to assisting you.
*This We Know Boise Rental Market Report is based on a survey of 9,740 rental units. It refers to the city of Boise and the surrounding areas of Meridian, Eagle, Kuna, Star, and Garden City. Select data obtained from the Intermountain MLS, Community Planning Association of Southwest Idaho, and the 2021 SW Idaho Vacancy Report Q2 from the Southwest Idaho Chapter of the National Association of Residential Property Managers.