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Current mortgage rates above 7% impact Idaho homebuyers

Although some people think current rates are shocking, experts said there are some silver linings.

BOISE, Idaho — Current mortgage rates above 7% make for a challenging market for some people looking to buy their first home in the Treasure Valley, including mom of two Samantha Robles. 

Robles and her husband moved into their apartment five years ago. She said they started looking for a home in July.

"When you go along housing prices, and then on top of it, you have the rates, it feels almost impossible for you to be able to get in anything," Robles said. 

Federal data shows as of Aug. 31, the 30-year fixed rate mortgage average is 7.18%. That is about a 1.5% increase from last year when rates sat around 5.66%. 

Those numbers may people shock because just a few years ago, mortgage rates were around 3 or 4%, according to Peter Crabb, Northwest Nazarene University finance and economics professor. In actuality, rates above 7% are not uncommon. 

"We were at these lower rates – the 3%, the 4%, mortgage rates – we were at those below average rates for quite some time, almost a decade," Crabb said. "You know, so a lot of people coming into the housing market, you know, they didn't know anything else."

Crabb said above 7% is the historical average for the 30-year fixed rate mortgage in the U.S. It is hard to predict when rates will come back down since they hinge on inflation. 

But loan officer Chris Uberuaga said current rates, even though some people think they are high, might actually help some homebuyers. 

"We can help the realtor structure a deal on a purchase of the home that allows us to use lending programs to lower their monthly payment hundreds of dollars a month," Uberuaga said. 

Additionally, sellers might be more willing to negotiate since inventory is low and there are fewer buyers. For those reasons, Uberuaga said people should not always wait for rates to go down. 

"Let's say it's a year from now, and the rates are 1% lower and appreciation is at 5%. You're going to find that even though your interest rate is lower, you're paying more for that home and your monthly payment is actually going to be about the same," he said.

Uberuaga encouraged people to work with reliable, trusted mortgage officers. Those officers can help people navigate the market and set them up for success, even if they do not immediately qualify for a loan. 

But Robles believes the current mortgage rates, compounded with high house prices, are discouraging. 

"If these rates and prices keep going up, then there's going to be no way for people my age to be able to buy houses and we're just going to [stay] renters," Robles said. 

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