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The Mortgage Bankers Association is predicting a slowdown in mortgage refinances over the next year, a prediction that means another tough year ahead for Idaho mortgage lenders. Mortgage refinances have enabled many lenders to keep their heads above water as historically low Idaho mortgage rates encouraged thousands of existing home owners to refinance their mortgages in order to cash out for home improvements, lower their interest rates, or even to reduce the term of their loans.

But as Idaho mortgage rates creep up from the historic lows we seem to be getting accustomed to, the refinance market is bound to slow down. Add to this that many homeowners have already taken advantage of refinancing opportunities, and the number of potential customers drops even lower.

That said, sales of existing homes are expected to improve, but not drastically enough to make up for the loss expected from Idaho refinance business. Home prices overall are still expected to drop (by about 1% in 2011), but new home sales is predicted to increase by just 2% in 2011.

Idaho home owners who recently purchased a home or recently refinanced and have rates at 4 or 4.5% are likely to stay put for the foreseeable future, because the chances of getting loan terms that good again will be slim as rates increase. While that group remains stagnant, Idaho real estate agents will continue to sell off old foreclosure inventory (even as new foreclosures slow), keeping home prices down for the next year or two, at least.