Idaho Housing Affordability in 2025: High Prices and Tight Supply Test Buyers

Idaho Home Prices Soar Beyond Incomes

Idaho’s housing market in 2025 remains high-priced and challenging for local buyers, with home values far outpacing incomes. The median home price statewide has now surged to around $500,000, far exceeding the median household income (roughly $60,000)¹.

This gap means many families are struggling to afford a home under traditional circumstances. “We’ve seen rent costs increase by 40% in recent years and housing costs increase by about 50%. [We’ve] seen an increasing number of local families be priced out of the market,” said Ali Rabe, director of Boise-area housing nonprofit Jesse Tree². Rabe noted she doesn’t expect prices to “revers[e] back to where [they] were” before the pandemic boom, though she is hopeful the market will cool off as new developments come online³.

Housing affordability is typically defined as spending no more than about 30% of income on housing costs (including mortgage, taxes, and insurance). By that standard, Idaho is one of the least affordable states in the nation. In fact, a recent National Association of Realtors report ranked Idaho as the second-least affordable housing market in the country (trailing only Montana)⁴.

Related: These Are the 30 Idaho Towns Where It’s Impossible to Buy a Home Because Prices Are Out-of-Control

Even households earning $100,000 a year – well above Idaho’s median income – can afford only about 17% of the homes listed for sale in the state⁵. In the Boise area, the situation is even tighter: just 1 in 10 homes on the market is affordable to a $100,000-income family⁵. Realtors and economists say this affordability crunch is the result of home prices rising much faster than wages over the past few years. “For many years, we’ve been an affordable housing market, but it might be time for a reset,” said Robert Spendlove, a senior economist who studies Idaho’s economy^6,7. “When the pandemic hit, many moved to Idaho from the coast, and I don’t see those folks moving back. We’re likely at a permanent higher level.”

By the numbers, Idaho’s housing market illustrates the affordability challenge:

• Median home price (statewide): Around $450,000–$500,000 as of early 2025^1,6, after a rapid run-up in recent years. (By comparison, the U.S. median home price is about $416,000.)
• Median household income (Idaho): Approximately $60,000–$74,000^1,5, not keeping pace with home prices.
• Mortgage interest rates: ~6.5%–7% for a 30-year fixed loan in late 2024^8,9, up from ~3% in 2020–21. Higher rates significantly increase monthly payments, pricing some buyers out.
• Affordability for locals: A household needs about $150,000 in annual income to afford half the homes on the Idaho market¹⁰ – well above what most families earn.

Tight Inventory and Market Trends

One major factor driving up prices is Idaho’s limited housing supply. The state’s inventory of homes for sale remains tight in 2025, giving sellers an edge. Idaho currently has only about a 2.9-month supply of homes on the market¹¹ – far below the roughly 5–6 months’ supply that experts consider a balanced market (where neither buyers nor sellers have a strong upper hand). More listings have begun to appear compared to the frenzy of 2021, but not by much.

As of late 2024, there were just over 9,000 homes for sale statewide, roughly the same or slightly fewer than a year prior¹². This meager inventory means competition remains stiff for buyers, even if bidding wars have cooled from their peak. In fact, only about 14% of homes in Idaho are now selling above the asking price, down sharply from the bidding-war days of a couple of years ago¹³. This indicates buyers in 2025 have a bit more negotiating power than during the pandemic boom, though it’s still far from a buyer’s market. “The unprecedented price growth of the past four years has squeezed many buyers out of the market,” notes a recent report by a regional mortgage firm, explaining that reduced demand led to a slight market correction and slower sales¹⁴.

Several trends are keeping Idaho’s housing supply tight. One is the so-called “lock-in effect,” where existing homeowners are reluctant to sell because they locked in ultra-low mortgage rates a few years ago. With over 80% of homeowners statewide holding mortgages below 6% (and about 1 in 5 enjoying rates below 3%¹⁵), many hesitate to give up their cheap loans – especially when buying a new home would mean financing at today’s higher rates. This has led would-be sellers to stay put, limiting the number of homes hitting the market.

Another factor is population growth: Idaho’s population continues to rise (it topped 2 million residents in 2024 for the first time¹⁵), fueled by newcomers drawn to the state’s economy and lifestyle. New construction has not fully kept pace with this growth. “We’re short about five million housing units nationally, and about 20,000 units in Idaho,” Spendlove said, pointing to a structural shortage of homes at both the national and state level⁷. This imbalance between high demand and low supply has kept upward pressure on prices. It also means Idaho’s market remains brisk: in a balanced environment a home might take 4–6 months to sell, but recently Idaho homes still sell in just 2–3 months on average, and often much faster in hotspot areas^16,17.

On the price front, there are signs the skyrocketing values have plateaued somewhat. After double-digit annual price gains through 2021, Idaho saw a brief dip in 2022 – home prices in Boise, for instance, fell nearly 19% from their mid-2022 peak during a market cooldown¹⁸. However, the decline was short-lived. By late 2024, prices had bounced back to within 6% of the all-time high in many areas¹⁸. Statewide, average home prices were up roughly 2–3% year-over-year entering 2025¹⁹, a much gentler increase than the frenetic gains of the past, but still an upward trend. In Ada County (which includes Boise), median house prices hover around $535,000²⁰; neighboring Canyon County (Nampa/Caldwell) offers relatively lower prices around $400,000 on average^21,20.

Related: 16 of the Best Small Towns in Idaho’s Potato Country that Support Farm Tourism

The price stabilization is a mixed blessing: it hints that the market is no longer overheated, but it hasn’t been enough of a drop to substantially improve affordability for middle-income buyers. “Housing affordability [in 2024] remained at the worst levels seen in the past decade,” Boise Regional REALTORS observed in a year-end report, noting that the average U.S. family would need to spend over 40% of their income to afford the median-priced home²². That figure was about 30% just a few years ago, illustrating how much harder buying a home has become both in Idaho and across the nation.

Idaho vs. National Housing Trends

Idaho’s housing challenges mirror a broader national trend, but in some ways they are more acute. Across the United States, home prices and interest rates jumped in recent years, worsening affordability from coast to coast. In 2024, U.S. housing affordability hit a multi-decade low, with the typical American household needing to devote ~42% of its income to afford a median-priced home (with a standard mortgage)²². No state in the country currently meets the definition of “affordable” housing by historical norms, according to the NAR²³. Even traditionally low-cost markets have seen prices outstrip incomes. In that context, Idaho’s situation – while severe – is part of a nationwide affordability crunch.

Related: 10 Secluded Towns Provide Unique Retreats in the Pioneer Mountains of Idaho and Montana

There are, however, some distinctions in Idaho’s market. The state was among those that saw an influx of out-of-state buyers during the pandemic, as remote work and a quest for affordable living drew people from higher-priced regions (like California and the Pacific Northwest) into Idaho. This surge in demand helped propel Idaho’s home values upward at one of the fastest rates in the nation²⁴. Now, even as national price growth cools, Idaho’s continued population growth and limited housing stock mean it hasn’t experienced the kind of price corrections seen in some expensive urban markets.

Nationally, some cities (e.g. San Francisco or New York) saw modest declines or flattening in home prices in 2023; by contrast Idaho’s median prices are still rising, albeit more slowly¹⁹. Additionally, Idaho’s income levels rank lower than many states, which exacerbates the affordability issue locally²⁵. “Idaho has some of the lowest wages in the country, which contributes to the affordability problem,” Rabe explained²⁵. In essence, Idaho’s housing costs have jumped to “big city” levels, but paychecks have not – a combination that places the dream of homeownership out of reach for a growing share of residents.

Another common thread between Idaho and the rest of the U.S. is the impact of mortgage interest rates. The Federal Reserve’s interest rate hikes over 2022–2023 pushed typical 30-year mortgage rates from record lows (around 3% in 2021) to around 7% in 2023⁸. As of early 2025, mortgage rates hover in the mid-6% range, still roughly double what they were a few years ago⁹. These higher rates have a major effect on affordability: they add hundreds of dollars to the monthly cost of buying a home, effectively shrinking buyers’ budgets.

For example, a $400,000 mortgage at 7% incurs a much larger monthly payment than at 3%, meaning many buyers can no longer afford the same priced home they could in 2020. This phenomenon is nationwide, and it has tempered demand – some buyers are waiting on the sidelines in hopes that rates will ease. Real estate experts say this dynamic is one reason home prices aren’t climbing as rapidly now: buyer demand pulled back when loans became more expensive. In markets like Idaho where prices were already high, the hit to affordability from interest rates was even more pronounced. “Over the past two years, homebuyer demand has tended to rise when mortgage rates approach 6% but lose momentum when rates climb past 7%,” observed local market analyst Summer Aston, describing buyers’ sensitivity to financing costs²⁶.

Encouragingly, the forecast for 2025 offers some hope on the national stage. Many economists predict that mortgage rates will gradually tick down in the coming year as inflation cools²⁷. Even a decline to the low-6% or high-5% range could improve buyers’ purchasing power a bit. “Mortgage rates are forecast to slowly decrease over the next 12 months, which will help improve affordability for borrowers,” says Orphe Divounguy, a senior economist at Zillow²⁷.

At the same time, wages are expected to continue rising – potentially around 4% in 2025 – which, if it outpaces home price growth, would boost homebuyers’ financial position²⁸. “If incomes continue to grow at a faster pace than prices and rents, and mortgage rates continue to move in the right direction, affordability improves,” Divounguy explains²⁹. In short, while nobody expects Idaho homes to suddenly become cheap, the combination of slightly lower interest rates and higher incomes could bring a bit of relief to buyers by late 2025.

Buyers and Sellers Adapt as Affordability Stays Front and Center

With homeownership a stretch for so many, Idahoans are adapting in creative ways. One emerging trend is communal or multigenerational homebuying – essentially, teaming up with family or friends to buy a house together. This approach allows multiple incomes to qualify for a mortgage and share the costs. “It looks like parents are investing more in generational housing and helping to create equity for their kids by purchasing a home with them… [so the kids can] eventually take it over and refinance under just their own names when they’re able to qualify on their own,” said Jodi Harada, a realtor in Boise³⁰.

Harada notes that more young adults who can’t afford a house solo are partnering with parents or roommates to enter the market. Fellow Boise realtor Dani Gonzales has observed the same pattern: “We’ve seen… a mom and a dad buying a house with their children. They might be looking for their forever home, but allowing their child also to live with them to gain that equity as well,” Gonzales said³¹. These arrangements reflect a pragmatic response to high prices – essentially, pooling resources to achieve homeownership, with the understanding that one generation may eventually buy out the other.

Homebuilders and developers are taking note, too. Some are designing new houses with flexible layouts to accommodate multigenerational living or co-buying arrangements. “As costs have increased, it’s forced buyers and builders to get more creative and try to create options that can appeal to multiple types of buyers or multigenerational living situations,” explained Russ Van Wagenen, president of an Idaho homebuilding company³².

For example, builders are adding accessory dwelling units (ADUs) or separate entrance suites within single-family homes that allow extended family or friends to live together but maintain some independence³³. These innovations are still relatively new, but they show how the industry is adapting to the affordability challenge by rethinking the traditional single-family home model.

On the seller side, the market’s transition in 2025 requires adjustments as well. Gone are the days when most homes would sell in a week with multiple offers well above the list price. Today’s sellers often need to price their homes carefully and may have to wait a bit longer for the right buyer. Homes are spending an average of about two months on the market in Idaho (a few weeks longer than a year ago)^16,17, as buyers take more time to shop and interest rates limit the frenzy.

Some sellers are offering incentives or concessions – for instance, helping cover closing costs or temporarily buying down the buyer’s mortgage rate – to attract interest in higher-priced homes. However, because inventory is still relatively scarce, well-priced homes in desirable areas continue to sell briskly. Many sellers are also homeowners who locked in low rates, so if they do decide to list their home, it’s often because they’re relocating or otherwise need to move – meaning they tend to price realistically rather than just testing the waters.

Looking ahead, Idaho’s housing market will likely remain a balancing act between strong demand and stubborn affordability issues. New housing developments (from suburban subdivisions to urban apartment projects) are in the pipeline across the state, which could gradually add inventory and ease some pressure on prices. “I have hope [the market] will cool off,” Rabe said, noting the influx of new housing being built locally³. If mortgage rates indeed dip closer to 6% or below as forecast and more sellers list their homes, buyers could see a bit more breathing room by late 2025.

Nationally, experts like those at the National Association of Realtors foresee an uptick in home sales in 2025 compared to 2024, as conditions improve slightly³⁴. Idaho may follow that pattern, though any relief is likely to be incremental. After years of roller-coaster changes, a period of stability – with slower price growth and gradually improving affordability – would be a welcome trend for Idaho’s housing market. As Zillow economist Orphe Divounguy put it, “It’s just good news for the housing market going forward” if incomes rise and costs come back into balance²⁹. For now, Idaho’s would-be homebuyers are watching the market closely, hoping 2025 brings them closer to the Idaho home they’ve been dreaming of – at a price they can finally afford.

References

1. Idaho Business Review – Communal homebuying rises in Idaho amid soaring prices
2. Boise State Public Radio – Idaho ranks as 2nd least affordable state for housing
3. Boise State Public Radio – Idaho ranks as 2nd least affordable state for housing
4. Boise State Public Radio – Idaho ranks as 2nd least affordable state for housing
5. Boise State Public Radio – Idaho ranks as 2nd least affordable state for housing
6. Idaho Business Review – Economist discusses Idaho economy, inflation, and housing
7. Idaho Business Review – Economist discusses Idaho economy, inflation, and housing
8. Boise Regional REALTORS – December 2024 Year-End Market Report
9. Idaho Business Review – Economist discusses Idaho economy, inflation, and housing
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11. Sammamish Mortgage – Idaho Housing Market Inventory: 2025 Update
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14. Sammamish Mortgage – Idaho Housing Market Inventory: 2025 Update
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17. Houzeo – Idaho Real Estate Market: What to Expect in 2025?
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19. Sammamish Mortgage – Idaho Housing Market Inventory: 2025 Update
20. Good News Realty Group – Idaho Real Estate Market 2025: Everything You Need to Know Before Moving To Idaho
21. Sammamish Mortgage – Idaho Housing Market Inventory: 2025 Update
22. Boise Regional REALTORS – December 2024 Year-End Market Report
23. Boise State Public Radio – Idaho ranks as 2nd least affordable state for housing
24. Good News Realty Group – Idaho Real Estate Market 2025: Everything You Need to Know Before Moving To Idaho
25. Boise State Public Radio – Idaho ranks as 2nd least affordable state for housing
26. We Know Boise – 2025 Housing Forecast: Why January Could Be a Turning Point for Housing Market
27. Money – Will Home Prices Go Down in 2025? Experts Predict
28. Money – Will Home Prices Go Down in 2025? Experts Predict
29. Money – Will Home Prices Go Down in 2025? Experts Predict
30. Idaho Business Review – Communal homebuying rises in Idaho amid soaring prices
31. Idaho Business Review – Communal homebuying rises in Idaho amid soaring prices
32. Idaho Business Review – Communal homebuying rises in Idaho amid soaring prices
33. Idaho Business Review – Communal homebuying rises in Idaho amid soaring prices
34. National Association of Realtors – National Association of Realtors® Unveils 10 Top Housing Hot Spots for 2025