IDAHO, USA — According to StorageCafe Census data, the Gem State is a migration magnet.
Idaho topped the nation with almost 25 people for every 1,000 people being newcomers to the state. A couple of our neighboring states, Wyoming and Washington, actually had negative migration.
Who are the people moving here? The biggest age group moving to Idaho from other states is millennials: established professionals and families. But the big question could be, where are people moving to Idaho from? What could it possibly be? It's exactly where you think it is, California. Those angry bumper stickers are based in some truth.
The biggest chunk of newcomers from out of Idaho, are coming from California. The second biggest chunk comes from Washington, followed by Colorado. It's important to note that while all those states have rural areas, that's not where people are moving from. Census data shows that people are moving out of the most populous areas, like around L.A., Seattle, and Denver. That gives a clue as to why those folks are moving to the Gem State.
U.S. Census data shows the majority of Californians are able to become homeowners in their first year in Idaho. They're able to sell their California homes, or Seattle or Denver homes, for a lot more than the price of a home here in Idaho. That's exactly why a lot of locals are worried about getting priced out of the market, as the demand and prices increase. All that's Census data, so it's a bit older.
Let's take a look at what Intermountain MLS tells us about the real estate market as of just last month.
Intermountain MLS - Nov. '22 to Nov. '23
- ADA COUNTY
- Homes Sold: DOWN 5.1%
- Median Price: UP 1%
- CANYON COUNTY
- Homes Sold: DOWN 8%
- Median Price: DOWN 3.9%
The number of homes sold in Ada and Canyon Counties is down 5.1% and 8% respectively. So, the market is still cold. And the prices are not spiking, as we all fear. In fact, they're only up 1% in Ada and actually down almost 4% in Canyon County compared to last year. That's good news, right? The people moving to Idaho aren't driving up prices? Not so fast, the other piece of the puzzle is mortgage rates. And those are still too high for a lot of folks.
We're still pushing almost 7% for a 30-year fixed loan. And while that is on its way down, it's coming down slowly, and still up more than six tenths of a percent over last year. That's driving up overall mortgage payments, cooling the market, and making it tougher for folks to get into homes. But can we expect that to change soon?
Idahoans have been hoping for that for a year; and it really depends on how you define “soon.” The Federal Reserve announced just a few days ago that it is holding its key interest rate steady for the third straight time. That rate foreshadows what the mortgage rates will do. So, they're not going anywhere right now.
But while that key rate is staying where it's been since July, Fed Chair Jerome Powell said we may see a change, eventually, "While we believe our policy rate is likely at or near its peak for this tightening cycle, the economy has surprised forecasters in many ways since the pandemic…Ongoing progress towards our 2% inflation objective is not assured. We are prepared to tighten policy further if appropriate."
In fact, committee members penciled in at least three rate cuts for this coming year. So, that's something to look forward to, but not bank on. Remember, those rate cuts are penciled in.
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