TWIN FALLS • Fannie Mae and Freddie Mac are back in the news again, but this time it’s not for catastrophic reasons.
Home prices nationally jumped 7.2 percent so far in 2013 relative to last year, which equates to more valuable federally backed mortgages. In Idaho, home prices rose 9.3 percent from last year, making it the 11th strongest housing market in the nation.
“It’s another sign that Idaho’s economy and housing markets are gaining momentum,” said Gerald M. Hunter, President of the Idaho Housing and Finance Association.
There are many complicated factors that measure housing market stability, including expanding local economies, fewer loan delinquencies and foreclosures, increased property values and “historically” low interest rates, he said.
“Idaho’s economy is coming back stronger than the national average,” Hunter said. “Some of it is a reflection of Idaho’s overall property prices and it’s resiliency during the recession.”
A rebounding housing market is not good news for everyone. Some first-time home buyers are struggling more than ever in the Magic Valley because of strict down payment rules, said Magic Valley Builders Association President Brad Wills. Tighter loan requirements are in place to prevent another market bubble from bursting like it did in 2007, he said. Young and first-time home buyers are a smaller part of the local market, Wills said.
“It’s just harder to get a loan for younger people because they don’t have the money for a down payment or they don’t’ have the credit yet,” he said.
For higher income families, the Twin Falls housing market is doing well compared to recession levels, but new builds still don’t compare to pre-recession levels, Wills said.
“We’re still a third what we did in 2005, 2006,” he said.
Some 664 single-family homes were constructed in Twin Falls in 2005 and 547 in 2006. A mere 93 homes were built in 2011 in Twin Falls.
Last year there were 159 homes built, there have been 131 already this year, an increase that’s swamped the Twin Falls Building Department, officials said.
South-central Idaho has one of the fastest growing economies in the state with more than 30 large corporations locating or expanding their business in the region since 2001. It’s not as easy to compare the Magic Valley’s housing market with other regions in the state, said Hunter, because different areas in Idaho have entirely different markets. But there are similar market themes.
“Delinquencies are lower. Home sales are picking up. Pretty much every market is doing better and doing good,” Hunter said. “There are different parts of the state that had different paths to get where we are today.”
Skeptics of a rebounding market point to the possibility of another housing bubble burst, Hunter said. While short-term gains are clear, long-term effects of the recent Federal Reserve decision to lower interest rates to “historic lows” are uncertain.
“That’s a crystal ball question,” Hunter said.