NAMPA, Idaho β The Federal Reserve lowered U.S. interest rates this week by a quarter percent, marking the first rate cut in nearly a year and bringing new hope to Idaho's challenging housing market.
Local realtors say the cut could help move more homes from "for sale" to "sold" as Idaho home buyers become more optimistic about entering the market.
WATCH: Idaho Realtors discuss impacts of lowering interest rates
"It signals that the federal government is paying attention, that that's what the public is wanting to see in order to start coming back to the table to purchase homes," said Sarah Weaver, president-elect of Boise Regional Realtors.
The quarter-percent interest rate cut comes after months of pressure from President Trump for the U.S. central bank to lower interest rates. Federal Reserve Chair Jerome Powell says they've been taking into account new tariffs, the labor market, and inflation.
"I think we're now reacting to the much lower level of job creation and other evidence of softening in the labor market and saying, well, those risks are maybe not fully balanced but moving in the direction of balance now, and so that warrants a change in policy," Powell said.
Powell warns inflation is still a concern, but the drop should make it easier for Idahoans to qualify for a home loan.
When interest rates shoot up before a home can finish being built, Weaver tells me many clients had to cancel contracts.
"If they weren't already locked, they were unable to purchase the home that they maybe had a contract on, and rates suddenly jumped, and they couldn't qualify to make the payment on the new rate adjustment because they went up so quickly," Weaver said.
The Idaho Housing and Finance Association says the average home loan rate has fallen that same quarter percent in the last few weeks in anticipation of the Reserve's decision.
"And now we're seeing that coming back in that range of that low sixes to high fives [percentages], which definitely, with the trend of the rates coming down, makes things more affordable, especially those that are first-time homebuyers that are concerned about budget numbers," said Chuck Kracht, executive vice president of Idaho Housing & Finance Authority.
The organization offers many forms of assistance through buyer education.
"They allow a borrower or a prospective buyer to bring as little as $500 of their own money to the table. And then they could get help through a second mortgage for the down payment assistance, for their closing costs, anything else they might need," Kracht said.
Experts expect the Federal Reserve to make at least two more rate cuts this year, and realtors say they're expecting more cuts into 2026.
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