BOISE, Idaho — The Federal Reserve has increased rates to combat inflation, and the Boise housing market is already beginning to see the impact, according to Boise Regional Realtor President Becky Enrico-Crum.
Today, homebuyers are receiving loans with interest rates between 5 to 6%, Enrico-Crum said. A year ago, interest rates were closer to 3%.
"It was like free money, everyone could buy a house," Enrico-Crum said.
That led to a highly competitive market. It was normal for a home to receive offers from 11 different buyers, according to Enrico-Crum. To win the sale, buyers would volunteer to skip a home inspection or appraisal from a bank.
"People were jokingly saying, 'Can I put your kid through college? Then will you sell me your house?'" Enrico-Crum said. "Now the dust is starting to settle. Prices are starting to stabilize."
The market responded to higher interest rates with less demand from buyers. It has led to the largest supply of homes for sale in the Ada County market since 2016, Enrico-Crum said.
"I think it's a good thing for buyers, because they have choice and don't have to buy houses that are overvalued for the market," Enrico-Crum said.
Less demand from buyers means less competition. Rather than a home selling the same week - or weekend - it goes on the market, homes are staying for sale for up to a month, according to Enrico-Crum.
These factors allow a buyer to sift through more options and remain patient through the buying process. Though, not everything is returning to pre-pandemic times.
Some changes seem to be permanent.
"People are still gonna [move to the Treasure Valley], and they’re still gonna enjoy our lifestyle," Enrico Crum said. "All of us are gonna have to mentally adjust to this is the new normal."
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