BOISE, Idaho — Homes in 97% of U.S. cities are overvalued, according to financial services company Moody's Analytics.
In Boise, Moody’s found homes are 73% overvalued, making it the most overpriced city in the nation. The study comes as mortgage rates hit its highest level since 2009, adding another hurdle for anyone trying to buy a house in our growing Idaho.
“We've seen rates rise quite a bit these last couple of months,” Jared Cook, State Manager for Mortgage at Zions Bank, said.
Earlier this week, the Federal Reserve increased the 30-year mortgage rate to 5.27%, up from 5.1% in the previous week, making it the highest it’s been in 13 years; compare that to a year ago when the average rate stood at 2.96%. The increase is part of an effort to battle the worst inflation in 40 years. Cook told KTVB that, as a result, Zions has seen some of its borrowers now look to switch from a 30-year fixed mortgage to an adjustable rate, just to help them qualify for a home easier.
“Meaning the interest rates are quite a bit lower on an adjustable rate mortgage compared to a 30-year fixed,” Cook said. “For every 1% the interest rate rises, you can expect to pay approximately $300 more a month on a $500,000 mortgage.”
Making things even tougher for those who are trying to buy a house in an already tough housing market.
“More than ever, they need to know where their credit score is, make sure that they're paying down debt, maybe save for a little bit more of a down payment. that way, they're going to get the best rate possible and be able to afford more of a home mortgage,” Cook said.
He also encourages prospective home buyers to talk to at least three different loan officers and really shop around in this market because banks and mortgage companies have different products and rates. Cook adds, whatever they say they can do for you-- make sure to get it in writing.
“A lot of people are just trying to decide whether it's good time to buy a home or not, and I’d recommend that they go and lock in their rate now and find their home because the federal reserve is saying that they're going to continue to raise interest rates for the rest of this year,” Cook said.
Watch more Local News:
See the latest news from around the Treasure Valley and the Gem State in our YouTube playlist: