Idaho’s real estate market shows dynamic price trends and mortgage rate shifts in Q3

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In the third quarter of 2023, Idaho’s real estate market witnessed a dynamic landscape, with rising home prices fueled by mortgage rate changes. 

During the Q3 period, more than 80% of metro markets nationwide (182 out of 221) reported increasing home prices, according to the National Association of Realtors’ latest report. Eleven percent of the 221 tracked metro areas registered double-digit price increases over the same period, up from 5% in the second quarter.

“Homeowners have accumulated sizable wealth, with a typical homeowner gaining more than $100,000 in overall net worth since 2019 and before the height of the pandemic,” said NAR Chief Economist Lawrence Yun. “However, the persistent lack of available homes on the market will make the dream of homeownership increasingly difficult for younger adults unless housing supply is significantly boosted.”

The national median single-family home price rose 2.2% year-over-year to $406,900 in Q3, a turnaround from the 2.4% decline in the previous quarter.

Regionally, the South led with 46% of single-family home sales and a 1.7% price increase. The Northeast and Midwest saw 5.3% and 5.2% price growth, respectively, while the West saw a 0.6% increase.

According to Windermere real estate Chief Economist Matthew Gardner, in the state of Idaho, home prices rose 2.7% year-over-year to $636,148, with a 5.1% increase from the previous quarter.

In the third quarter of 2023, 4,945 homes were sold, marking a 6.2% decrease from the third quarter of 2022 and a 2.7% dip from the second quarter of this year.

Listing activity showed an 11.3% increase from the second quarter, contributing to rising sales in most market areas.

Compared to the same quarter in 2022, sales declined in all the northern counties covered by the report and in every county except Canyon and Blaine in the southern Idaho markets. However, when compared to the second quarter of this year, sales increased in all markets except Boundary County in northern Idaho and Canyon, Gem and Ada counties in the southern part of the state.

Pending sales in the third quarter were lower than in the second quarter of 2023, hinting at a potential slowdown in sales during the final quarter of the year.

Nationally, housing affordability worsened due to rising prices and mortgage rates, according to the National Association of Realtors. 

“Following the big price changes during the last several years, it’s natural to witness momentary swings in prices,” Yun said. “Some markets that experienced sizable home price gains since 2020 have turned lower, resulting in temporary relief for prospective home buyers. Also, a few markets in the West that experienced price declines in the prior quarter have seen prices rise again.”

Monthly mortgage payments on a typical single-family home with a 20% down payment increased to $2,192, up 7% from Q2 and 19.2% year-over-year. First-time buyers faced greater challenges, with a 6.9% increase in monthly payments.

To afford a 10% down payment mortgage, a family needed a qualifying income of at least $100,000 in 45.7% of markets, up from 40.3% in the prior quarter. In contrast, in 2.7% of markets, a family needed less than $50,000 for homeownership, down from 6.3% in the previous quarter.