September Market Update: A Market in Waiting

The Reality of a Prolonged Recession

September brings with it not only the change of seasons but also another chapter in what has now been three years of a real estate recession. From 2023 through 2025, the housing market has faced some of the lowest transaction numbers in history. This has created challenges for both buyers and sellers, leaving many wondering when activity will finally begin to shift.

Interest Rates Begin to Ease

There is one glimmer of hope—interest rates have started to dip. After holding at 7% for much of the year, some lenders are now quoting 5.875% on conventional 30-year mortgages and even as low as 5.375% on FHA loans. Historically, buyer activity begins to increase when rates fall below 6%, particularly among first-time homebuyers. Although affordability remains a challenge, these lower rates could be the spark needed to bring hesitant buyers back into the market.

Mortgage applications are already ticking upward compared to this time last year, even if they haven’t yet translated into completed purchases. Many potential buyers are running numbers, applying, and waiting on the sidelines. This signals a pool of pent-up demand—buyers who are prepared to move quickly if rates continue to fall.

The Local Boise Market: Painful but Poised

Here in Boise, the story is a difficult one for sellers. Inventory is at a record high, and buyer demand remains weak. For every buyer in the market, there are nearly twice as many homes available, which means buyers hold the upper hand. Offers are often withdrawn at the negotiation stage, and transactions are falling apart at higher rates than ever before—most often during inspections.

For sellers, this means preparation is more critical than ever. Pricing competitively, completing a pre-inspection, and ensuring the home is spotless and free of major concerns are non-negotiable steps. Even with these challenges, history shows that fall months like September and October can sometimes bring a short burst of activity before the holiday slowdown. With interest rates dipping, there may be a small window of renewed buyer demand.

Looking Back to Look Ahead

A look at historical data reveals an almost eerie similarity to the years leading up to the 2008 housing crisis. From 2005 to 2007, the U.S. recorded over seven million annual home sales before crashing to four million per year. Since 2021, we’ve seen the same pattern—strong numbers followed by three consecutive years of historically low transactions.

The difference today is that the market is not weighed down by mass foreclosures or widespread short sales. That could mean recovery arrives sooner this time. Still, if history is any guide, the market may remain sluggish for another year or two before bouncing back. For those paying close attention, this period could represent opportunity. As the old saying goes, “Be fearful when others are greedy, and greedy when others are fearful.”

Michael Miller
FOUNDER, CEO & REALTOR®
[email protected]
208-600-2333