Boise Rental Market & Vacancy Rates

Overview

The average rent in Boise, ID, is $1,962 per month. Boise rents have increased by 19.78% over the past year and 37.97% over the past three years. The vacancy rate for all rental properties in Boise is 3.61%, up from 3.60% one year ago.

Average Rents in Boise by Property Type

In the Boise rental market, the average monthly rent for all property types in the third quarter of 2022 was $1,962. Boise rents have increased $324 or 19.78% from the third quarter of 2021. While below the record of $2,085 we saw in the first quarter, rents remain near all-time highs.

The average house rent in Boise is $2,115, the second-highest rate on record. From Q3 of 2021, that’s an 11.55% increase of $219.

Rental rates for four-bedroom houses declined $65 (-2.38%) from the previous year, finishing the quarter at $2,669—still the second-highest rate on record.

Three-bedroom home rates remain below 2022 Q1’s record of $2,242, finishing the quarter at $2,035. That’s still a $232 (12.87%) bump from the Boise rental market’s previous year.

Rents for two-bedroom homes finished the quarter at $1,640, an increase of $489 (42.48%) from a year ago.

Five-bedroom house monthly rental rates finished the quarter at $2,648. Keep in mind that the relatively small five-bedroom property sample size creates volatility.

The average apartment rent in Boise is $1,580. While below the record we saw in the second quarter, it’s a yearly increase of $248 (18.62%).

Boise rent prices for a one-bedroom apartment rose to $1,350, a $275 (25.58%) jump from 2021’s third quarter. Two-bedroom units topped out at $1,479, equating to a $205 (16.09%) yearly rise. Three-bedroom multifamily apartments hit $1,911, a yearly increase of $264 (16.03%).

Boise Rental Vacancy Rates

Boise’s average rental market vacancy rate for all property types increased to 3.61% in the third quarter of 2022, up from 3.60% last year. In contrast, 2020’s third quarter saw vacancy rates at 4.68%.

Single-family investment property vacancies rose from 3.47% the previous year to 5.13% in the third quarter of 2022. Rising single-family vacancies are due to seasonal trends and an increased supply as some homeowners are choosing to rent rather than sell their properties.

Apartment vacancy rates declined from 3.65% over the last twelve months to finish the quarter at 2.58%.

To understand those numbers a little better, it’s important to note that a healthy rental market typically sees vacancy numbers around 5-6%. At the current average of 3.61%, renters are feeling the same supply shortage as homebuyers. The short supply and high demand—fueled by a fast-growing population—are sending rental rates higher.

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Residential Investment Property Summary and Outlook

The 2021 rental market ended much in the same way it began, with pandemic-driven demand, high population growth, and record-breaking real estate prices driving rental rates to the highest level the Boise metro area has ever experienced.

As one of the main contributing factors, Boise's growing population is stretching a severe lack of available housing. The population has outgrown the number of residential properties built every year since the end of the recession in 2009, which means demand has surpassed supply for more than 12 years. At the beginning of 2020, that discrepancy expanded dramatically as Covid-19 brought even more people to Idaho, pushing Boise further into an extreme seller's market.

Boise's dwindling supply has kept buyer competition fierce over the last three years—many sales received multiple offers—and record-high demand has sent prices soaring. Between the third quarter of 2019 and the third quarter of 2022, the median sale price of a single-family house jumped $215,000.

The Treasure Valley remains in a critical housing supply shortage.

Significant price bumps, a limited supply, and volatile and rising mortgage rates have driven many potential homebuyers to the comparatively more affordable rental market. As the purchase market prices out more and more buyers, the demand for rental properties continues to swell.

Compounding that additional rental demand, the formation of new households has risen as friends and family members strike out and look for their own spaces. While there was an initial decline as the pandemic began, new household formations exploded after the initial lockdowns as renters sought out personal space.

Real estate price jumps, low supply, rising household formations, and the flood of pandemic-related population growth created a perfect storm. There just wasn't enough housing to meet Boise's demand. As a result, rental rates are breaking records every year, and vacancies remain near recorded lows.

This was vividly clear at the start of 2021—the first quarter saw Boise rental market vacancies reach an all-time low of 0.75%. As Q4 came to a close, a 1.64% vacancy rate indicated much of the same experience for renters going into the new year. Demand continued to dwarf available supply.

Note: Historically, Ada County rental market vacancy rates average between 5-6% for both single and multifamily rentals.

With the rental property supply below the historical market average, rents climbed, and Q1 of 2022 brought new records across the board.

2021 showed a marked change from the start of the pandemic when vacancies were spiking, and many landlords were reluctant to increase rents as Covid-19 took hold.

2020's combined average rent stayed reasonably consistent throughout the year, and Q4 of 2020 ended at $1,480, only a $70 jump from the previous year, an increase consistent with historical data.

That was not the case for 2021 and hasn't been for 2022.

2022's Q1 brought record-breaking rental rates in 8 out of the 10 metrics we monitor. Only four-bedroom single-family rentals stayed below their previous record, but that's more due to statistically fewer properties and available leases. Four-bedroom houses are still much higher than historical rent increases, with rents rising 7.76% from the previous year.

Notably, landlords have been bumping rates in an effort to keep up with the steeply climbing market, and average rents have shot up 19.78% over the past year.

Q1's combined average monthly rent across all property types hit a record of $2,085. That's a $529 (33.14%) twelve-month increase.

Moving into the second quarter of 2022, demand remained near-record levels driving prices higher across the rental market. Q3 showed some seasonal softness, but long-term trends appear to have remained intact. As Boise's population continues to grow by 2,000 people a month, demand is not dwindling—but it is continuing to exacerbate the supply shortage.

While we won't continue to see double-digit annual rent increases forever, expect the Boise rental market in 2022 to continue to follow last year's trend.

Prices

The single-family median home price in Boise, ID (metro) is $565,000. In the third quarter of 2022, the median sales price for duplexes was $588,350, $887,500 for fourplexes, and $2,397,500 for apartment buildings (defined as five or more units).

Affordability

Rents at 30% or below household incomes are typically considered affordable. 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 $69,952, equating to rents of $1,749 per month (at the 30% threshold).

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.

Estimated Apartment Projects Under Construction in 2022

• Boise = 1,436 units
• Meridian = 1,004 units
• Eagle = 47 units
• Garden City = 583 units
• Nampa = 159 units
• Kuna = 64 units
• Star = 148 units
• Caldwell = 123 units
• Middleton = 0 units

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 9,018 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 2022 SW Idaho Vacancy Report Q3 from the Southwest Idaho Chapter of the National Association of Residential Property Managers.