Rising mortgage rates haven’t slowed interest in Boise’s housing market

Mortgage rates closed in on three-year highs to start October, but the rising cost of financing a home has done little to check the Treasure Valley’s robust housing market.

Freddie Mac, the government-sponsored Federal Home Loan Mortgage Corporation, estimated that the national interest rate on a 30-year fixed-rate mortgage reached 7.28% during its weekly sweep of lender applications on Oct. 1 — its highest mark since October 2023.

Around Boise, though, the elevated price of borrowing appears to be bumping up against the bounds of Idaho’s ever-surging housing market. Waiting for rates to fall tomorrow could cost you much more than what you’d pay today.

The median price of a single-family home in Ada County reached $595,000 in August, nearly 7% higher than a year earlier, according to the most recent data available from Intermountain Multiple Listing Service, a regional real estate clearinghouse. Three years ago, the last time rates stayed over 7% for any significant stretch, the middle of the market was $75,000 cheaper.

Buyers are aware of that trend, and are angling to grab a piece of the market before prices float out of reach, according to Jared Cook, a Boise-based regional sales manager and mortgage officer at Zions Bank.

Nationally, the Mortgage Bankers of America found that demand for new loans has fallen to its lowest level in two years, CNBC reported. But Cook’s team in the Boise area hasn’t seen mortgage applications decline yet, he said.

“I can’t say that’s true for all of Idaho, but for the Treasure Valley, we haven’t slowed down,” he said.

“What I can tell you,” he added, “is that we’re seeing more buyers come to us asking, ‘How can I afford it?’ ”

More and more, buyers are getting creative to do so. When Cook started working in Idaho, rates were low, and nearly everyone opted for a 30-year fixed-rate mortgage. Now, he’s seeing customers buy into adjustable-rate products — essentially a bet that rates will fall and they can refinance for a better deal.

That’s particularly true for first-time buyers at the lower end of the market, which is where Cook focuses much of his work. People moving up into the luxury echelon can hold out for better terms, he said; first-time buyers, though, are still rushing to get a foot on the ladder, despite headwinds.

The Idaho Housing and Finance Association worked with some 4,500 buyers in that mold over the past 12 months, according to spokesman Ben Cushman. The organization administers federal housing programs for the state, but it also helps low- and middle-income homebuyers secure mortgages and down-payment assistance.

This year has been particularly busy, Cushman said. Around 2,500 clients opted for down-payment assistance through a second lien on their home — basically a second, smaller and shorter-term mortgage to generate the initial capital needed to buy a house.

“I think we’ve just had really strong, continued, sustained growth for the past seven or eight years, and that’s really what’s keeping our whole mortgage market going right now,” said Chuck Kracht, executive vice president of homeownership lending at IHFA.

Inventory “remains constrained,” Kracht said, which has kept prices on the upswing. Entry-level homes are particularly competitive, he said.

IHFA concentrates on the lower end of the market. Its typical loan is around $360,000, Kracht said. Today, a borrower with that loan is paying around $175 or $200 more a month than they would have a year ago, when the 30-year average mortgage rate was a percentage point lower. That’s $2,100 to $2,400 over the course of the year. In the past 12 months, though, the median home price in Ada County has gone up $36,000, according to the most recent like-for-like data from MLS.

IHFA customers — namely first-time buyers — are willing to pay more “to own something and start building equity,” Kracht said. “I think they look at that as a good trade-off to just renting.”

Cook has seen the same thing.

“It’s a tale of two markets,” he said. Cook hasn’t heard of many concessions to buyers in the $500,000 range and below, but he’s seen some softening from sellers in the million-dollar bracket.

So far, 2026 has been “one of the best years in the past several” for Michelle Bailey, president of the trade group Idaho Realtors. But, she said, she’s starting to see rates strain some of her clients. Lately, she’s seen a handful of entry-level buyers move back “onto the fence” as rates rose.

“I think it’s challenging,” she said. “I think it does affect them.”

Bailey expects fall — typically a busy season — will offer a better look at consumer confidence. She said she still gets buyers holding out for the days of 3% rates. Historically, though, Bailey said that 7% is well within a normal range.

Cook agreed.

“I think most buyers still feel that you’re going to have lower rates in the future,” he said. “For them, it’s just kind of about getting them through to when they can refinance next. You know, there’s a saying in this industry: ‘Marry the home, date the rate.’ ”

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