BOISE, Idaho — On this Growing Idaho, there's good news and bad news for the local housing market. We start with good news.
Interest rates are dropping. Freddie Mac says the average 30-year loan mortgage rate is 6.47%. That's a drop of more than a quarter-of-a-percent in just a week. It's still far from rock-bottom, but the Mortgage Bankers Association said, with these lower rates, refinance applications were up nearly 60% last week over last year. The curious thing is, normally, mortgage rates drop significantly when the Federal Reserve drops its key interest rate. But that didn't happen.
This is more good news. We're seeing mortgage rates dropping despite the Federal Reserve keeping that key rate exactly where it is. All this is to try to get inflation under control, because it's not where they need it yet, which is bad news.
Federal Reserve Chair Jerome Powell said, "If the economy remains solid, inflation persists, we can maintain the target current target range for the federal funds rate as long as appropriate. If the labor market were to weaken unexpectedly or inflation were to fall more quickly than anticipated. We were prepared to respond."
Just a couple weeks ago, the U.S. economy did look like it was slowing down. This is more bad news. The stock markets here and in Europe dipped, while Japan's market had its worst day since 1987.
Financial experts, like CNBC Senior Economics Reporter Steve Liesman, said it all goes back to interest rates, and what the Fed is not doing, "Part of the issue right there is this belief the Federal Reserve is a bit behind the curve here in terms of cutting interest rates."
The big question is, how are all these challenges in the U.S. and world markets affecting our local housing market? There's even more bad news from Redfin. It said, the median home price for Idaho is up more than 4 percent over last year, to $482,500. Meanwhile, the median home price for the Boise area is up even more, almost 6 percent over last year, to $535,000. All this, while the number of homes sold is down 12.6% compared to last year. Regardless, people will almost assuredly keep buying homes around here, because we keep making top five lists.
Meridian and Boise were both just named in the top five 'Places to Live in the West' by Livability. Also, Idaho is the 3rd-best state to move to, according to Consumer Affairs. So, it's all good news that we live in such an awesome place, but it could be considered bad news for many because we'll continue to attract people. Which is why this bad news here, that Agent Advice said Idaho is the 2nd-best state to move away from, is actually good news, that it could keep people away. But it won't.
We'll keep growing, Idaho.