Mortgage Rates vs. Home Prices in Idaho – What the Data Really Shows

Mortgage Rates vs. Home Prices in Idaho - What the Data Really Shows

Understanding mortgage rates vs home prices in Idaho is crucial for buyers and sellers. Buying a home in Boise, Meridian, or Nampa sometimes feels like trying to guess which potato sack race you'll win at the county fair - you know there's a pattern, but it sure doesn't look like it when you're bouncing around.

One of the biggest questions we hear is: "Do mortgage rates really affect home prices?"

The short answer: yes. When mortgage rates go up, home price growth tends to slow down. When rates drop, home prices often take off like a rodeo bull out of the chute.

What the Data Shows

Check out the graph below (straight from the Federal Reserve). It compares 30-year fixed mortgage rates (blue line) with Boise home prices (green dotted line):

• In the early 1980s, rates shot up above 18% (ouch!) and home price growth stalled.

• Through the 2000s, falling rates helped fuel home values.

• Post-2020, we saw record-low rates send Idaho housing prices sky-high… until mortgage rates climbed again in 2022, cooling the market.

In short: Idaho home prices and mortgage rates have a bit of a love-hate relationship.

How Big of a Deal Is It?

Studies show that even a 0.25% rate increase can cause home prices to slip 1 - 4% over time. In plain English: higher rates = buyers can afford less house, which slows demand. Lower rates = buyers can stretch their budgets further, and prices often rise.

Think of it this way:

• If rates drop, it's like giving Idahoans an extra scoop of mashed potatoes - demand goes up.

• If rates rise, it's like taking away the fry sauce - suddenly, nobody's as excited.

But It's Not Just About Rates

Here's the kicker: mortgage rates aren't the only factor. Inventory, credit availability, and the overall economy all play roles. Boise's recent boom wasn't just because of low rates - it was also driven by limited housing supply and an influx of new residents who discovered Idaho's secret (our mountains, rivers, and yes, our potatoes).

So while mortgage rates act like the thermostat, other forces are also heating or cooling the housing market.

What This Means for Buyers and Sellers in Boise, Nampa & Meridian

• Buyers: Don't sit on the sidelines waiting for "perfect" rates. Even if rates dip, prices could climb, offsetting your savings.

• Sellers: Rising rates might cool buyer enthusiasm, but Idaho's strong economy and lifestyle appeal keep demand steady.

Bottom line: timing the market is like timing when the Broncos will have a perfect football season - possible, but don't bet the farm on it.

Final Thoughts

Mortgage rates and Idaho home prices have danced together for decades - sometimes in step, sometimes stepping on each other's toes. But the big picture remains: when rates rise, affordability falls, and price growth slows; when rates drop, prices tend to rise.

If you're thinking about buying or selling in Boise, Meridian, or Nampa, let's talk strategy. At 1st Choice Mortgage, we track these trends daily and help our clients navigate them with confidence.

👉 Contact us today to find out how the current market impacts your plans.