Located near the foothills of the Rocky Mountains, Boise, Idaho, consistently ranks highly among other areas for its quality of life and fast growth. Boise is a hub for many industries and a growing tech sector has helped boost the small city’s economy.
But like many areas of the U.S., the Boise housing market experienced elevated home prices, high buyer demand and a low housing supply. Mortgage rates have come down to just below 7%, giving prospective homebuyers with affordability concerns a little bit of relief as they jump back into the market.
“Buyers are patient and very particular,” says Trey Langford, founder of home search website Build Idaho. “I have found that if a home is not 100% clean, all the maintenance issues fixed and priced appropriately, they won’t even make an offer.”
Using information from the U.S. News Housing Market Index, we’ve compiled the data you need for a better understanding of the current state of the market. Here’s what you should know about how the Boise housing market has changed over the past year, and a look ahead at 2025.
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How the Boise Housing Market Changed in 2024
Construction permits for single-family detached homes increased in 2024, but permits for multifamily buildings with two or more units decreased, based on data from the U.S. Census Bureau.
As of September 2024, 721 single-family home permits were approved in Boise — a 55% increase year-over-year. The latter half of 2023 saw many ups and downs, ending with 366 permit approvals in December, which have steadily increased in 2024. This year started with 512 approvals in January, peaking so far in July with 793 approvals — the highest level since March 2021, when 928 approvals were recorded.
“The big winner in 2024 has been the new construction market,” Erin Madden, associate broker at Zen Real Estate Group in Boise. “New construction sales have outpaced 2023.”
In the multifamily housing industry, there were 75 permits approved in January 2024, but the number of permits dropped to 53 in September. This is a 93% decrease since September 2023, the five-year peak. The peak in 2024 occurred in March with 168 multifamily housing permits approved, but it’s been steadily declining since.
Boise Housing Supply and Demand
The Boise housing supply decreased slightly after January, then crept upward before returning the same level by September 2024. Housing supply refers to the number of months it would take to sell the homes currently on the market at the current listing price.
“The Months Supply of Inventory (MSI), which measures the number of homes for sale divided by the average number sold per month, remained below 3 throughout the year,” Madden says. “A balanced market typically ranges between 4-6 months, indicating that we’re technically still in a seller’s market — though it may not feel that way compared to previous years.”
There were 2.2 months of housing supply in September 2024, also flat year over year, based on Redfin data. The U.S. national average is slightly above Boise, with approximately 2.68 months of housing supply during the same period, up from 2.14 months year over year.
Housing Supply | 2.2 mo +0.07 YoY
As of Oct. 23, the Mortgage Bankers Association’s seasonally adjusted Purchase Index decreased by 5% compared with the prior week. On an unadjusted basis, the index decreased by 5% compared with the previous week and was 3% higher year over year. Mortgage rates experienced mixed results, the MBA pointed out, but purchase applications are still stronger than last year’s pace. Refinance activity has recently decreased by 8% from the previous week, but it’s 90% higher than the same week a year ago due to lower mortgage rates.
Consumer sentiment in the U.S. was 70.1 out of 100 in September, according to the Survey of Consumers from the University of Michigan. This is a 2.2-point increase from the same time last year, suggesting higher consumer confidence in response to the Federal Reserve’s decision in September to cut its benchmark interest rate, the first cut since March 2020. Consumer confidence could further improve as the Fed announced a second cut to interest rates in November, which could potentially result in lower mortgage rates.
Consumer Sentiment | 70.1 +2.2 YoY
Median Home Price in Boise
The median home price for a single-family home increased slightly over the past year. The median home price in Boise was $480,000 as of September 2024, based on Redfin data. Boise’s median home prices were above the national median of $434,000, but home prices currently seem to be trending downward since June’s high of $510,000.
Median Price | $480k +1.5% YoY
Boise rental prices increased by 1.5% in September over the past year, standing at $1,801 per month, according to Zillow Observed Rent Index data. Rent prices peaked in June and have only come down slightly since then. Boise rent prices are lower than the national average of $2,050 in September 2024, a 1.8% increase year over year.
Rent Price | $1801 +1.5% YoY
Boise is the most populous city in Idaho and saw growth as a pandemic boomtown. With its high quality of life and affordable housing, the City of Trees ranks No. 2 on U.S. News’ rankings of Best Places to Live
and No. 5 on Best Places to Retire. The Boise metropolitan statistical area was the sixth fastest-growing region in the country as of the 2020 Census. As of December 2022, the Census Bureau’s annual American Community Survey found 302,858 households in the Boise region, a 7.9% increase year over year.
“For the Boise market, people don’t necessarily move here for the best home prices, they move here because of the way of life: family values, safety, adventure and freedoms are a few of the reasons people have migrated and will continue to come to the Treasure Valley,” says Cody Hunter, strategic construction advisor at Real Estate Bees and a construction professional who specializes in the Boise area real estate market.
Nationally, construction costs as of December 2023 were 1.8% lower than in 2022, according to the U.S. Census Bureau’s Construction Cost Index. This index accounts for builders’ costs when building new single-family homes. Construction costs peaked in November 2022 and came down in 2023. Since June 2023, construction costs have risen again, but not as sharply as in 2022.
Unemployment Trends in Boise
More than 410,900 Boise residents were employed as of September 2024, an increase of about 10,200 over the previous year, according to data from the U.S. Bureau of Labor Statistics.
Employment | 410.9 +10.2k YoY
The unemployment rate was 3.6% in August, a 0.4% increase year over year. Boise’s unemployment rate is lower than the national average of 4.2%.
Unemployment | 3.6% +0.4% YoY
Construction jobs dipped slightly to 7,800 in September 2024, down from 7,900 the previous year. Over the last five years, 1,800 jobs were added in the Boise area.
The low unemployment rate has also contributed to a low number of delinquencies and foreclosures. Data from Black Knight shows that foreclosure activity dropped by 0.1% year over year, sitting at 0.1% as of September 2024, and delinquency dropped just slightly to 1.9% in the same month. The delinquency rate describes loans 30 or more days past due but not in foreclosure. Foreclosure is the legal process that begins when a homeowner fails to keep up with mortgage payments.
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Builder Confidence in Boise Wanes
The National Home Builders Association and Wells Fargo Housing Market Index reported homebuilder sentiment in the Boise area was rated 41 out of 100 in September 2024, a 5-point decrease over last year. Builder sentiment peaked in April at 48, but has since come down.
“Currently, there are 163 $1M+ new construction homes listed for sale so I was surprised to hear a high-end builder was raising their prices this week,” Langford says.
Builder Sentiment | 41 -5 YoY
The Architecture Billings Index, an economic indicator for nonresidential construction activity, was rated 42.6 in September, down by 1.7 points over the last year. A score below 50 indicates a decline in firm billings from the previous month. While the current rating is lower, it’s still in line with normal fluctuations in the local market.
Architectural Billings | 42.6 -1.7 YoY
Boise Real Estate Market: Predictions
The outlook for the 2025 housing market in Boise all comes down to interest rates. According to Madden, potential buyers continue to sit on the sidelines hoping for more favorable mortgage rates.
“If rates drop significantly or show a consistent downward trend, we could see a strong spring market with notable price increases as more buyers enter the market,” Madden says. “However, if rates remain steady, the market will likely continue to be driven by demand in our growing area.”
Madden says that while interest rates may be a challenge for buyers, there are still opportunities to negotiate prices, seller credits or favorable terms thanks to recent increases in inventory and longer days on market. For sellers, Madden says it’s crucial to price competitively to get your listing to stand out.
Experts still expect the Federal Reserve to continue cutting rates, which could help push mortgage rates down and help ease affordability concerns.
“Idaho real estate agents are very optimistic looking into 2025,” Langford says. “The interest rates have been accepted as the new norm and as I like to say, ‘The crazier the world gets, the better Boise looks!'”
The U.S. News Housing Market Index predicts that Boise will continue to see an increase in single-family permit approvals and a decrease in multifamily approvals. Over the last year, single-family and multifamily housing predictions have been relatively in line with trajectories.
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Boise Housing Market Forecast originally appeared on usnews.com
Update 11/21/24: This story was previously published at an earlier date and has been updated with new information.