Home prices in almost every major metropolitan area, many small cities and most states have risen sharply month over the same month last year. There are several contributing factors. The first is historically low mortgage rates. Despite forecasts of a jump in inflation that will drive higher interest rates, mortgage rates actually have fallen slightly in the past several weeks. Another contributor to high home prices is a large trend of relocation from America’s large and expensive coastal cities to ones that are more affordable. Working from home has made that more possible. Finally, the recession brought on by the COVID-19 pandemic did not substantially affect middle-class and upper-class incomes.
The widely followed Case-Shiller home index monthly report shows that home prices have increased in the double digits most months this year, compared with the same month a year ago. If anything, the trend has accelerated. Some of America’s inland cities have been at the top of price rises. In May, home prices in Phoenix rose 23.9% compared with May 2020. Denver is another example at 16.4% over the same period, based on the CoreLogic Home Price Insights for May.
The state with the most extraordinary surge in May was Idaho, at 30.3%. Real estate data and sales site Zillow came up with a similar figure for May:
The typical home value of homes in Idaho is $389,218. This value is seasonally adjusted and only includes the middle price tier of homes. Idaho home values have gone up 27.8% over the past year.
Idaho would seem an improbable place for a run-up in housing prices. It is ranked 39th in total population among states at 1,839,106. Notably, however, it had the largest percentage increase among all states in population growth between 2010 and 2020, at 17.3%. It also has become what real estate agents call a “destination state” for people leaving California, the state with the largest population.
What is the future of home prices in Idaho? Not a bright one for some current residents. Local homeowner Nathan Eshleman told KTVB 7, “It was affordable when we first move and now it’s unattainable. To purchase a house in a Boise, it’s very difficult.”