top of page

Mortgage Rates Drop, Easing Anchorage Homebuyers Back into the Market

By: Nikki Giordano, CEO, AHBA

Anchorage homebuyers welcomed 2024 with a new sense of confidence. Mortgage interest rates dipped below 7% for the first time in months, falling to an average of 6.6% by February. That’s more than a

full percentage point lower than last year’s high of 7.79%. Falling mortgage rates help improve housing affordability, which in Anchorage, is at a near all-time high.


“Housing affordability is almost at its worst ever,” said Eric Visser, owner of Visser Construction. Visser made these remarks during AHBA’s 2023 Economic Summit. The annual event offers an in-depth economic forecast for Anchorage and features local and national experts and policymakers. Last year’s summit offered some tough news regarding housing affordability.


In 2019, the average sale price in Anchorage for a single-family home was $390,000. In 2022, that price shot up to $469,000. In addition to sky-high prices and elevated mortgage rates, Anchorage homebuyers battled record-low inventory, expensive property taxes and restrictive building codes.


“Housing affordability has gotten so bad that the only way to solve this problem is for dramatic changes to the building and land use codes here in Anchorage,” Visser said. 


Homeowners and the building industry experienced some wins last year. These housing challenges prompted conversations among policymakers and created grassroots campaigns. AHBA spent the year working with elected officials to make sensible changes to the code. The Anchorage Assembly repealed parking mandates and is working on making changes to Title 21 and Title 23, which relate to zoning and safety. There have also been changes to fill and grade codes and triplex and fourplex permitting standards.


While there’s still work to be done, 2024 holds some good news for homebuyers. Home prices remain high but there’s some relief, especially in the form of a healthy economy and buyer confidence. A surge in construction will add much-needed inventory to the housing market. The Alaska Department of Labor and Workforce Development is predicting construction jobs to grow by about 6% this year.


Experts with the Department of Labor also say the recently passed Infrastructure Investment and Jobs Act will benefit Alaska’s economy. Plus, a surge in tourism is also bringing money into the state. Last year Alaska experienced record tourism numbers with 1.6 million people visiting, up 20% from 2019. Similar numbers are predicted for this year.


A healthy economy helps create a healthy housing market. According to the National Association of Home Builders, builder confidence is climbing. It reached 44 points in January. This aligns with declining interest rates.


Housing sales typically pick up in the spring, with sellers listing more homes. Nationwide, about one-third of builders reported reducing home prices in January to drive sales, according to NAHB. But Anchorage homebuyers may not see much relief in prices. Anchorage is likely to continue to see limited housing inventory. During his remarks at the Economic Summit, Robert Dietz, the chief housing economist for the National Association of Home Builders, said in 2022, there was an 80% decrease in single-family permits for the Municipality of Anchorage. Dietz says this reflects policy problems.


Lower interest rates have improved housing affordability and are bringing sidelined buyers back to the table. With boosted buyer confidence and a backlog of buyers, the housing industry could see a busy spring.


Featured Posts
Recent Posts
Search By Tags
Follow Us
  • Facebook Basic Square
  • Twitter Basic Square
  • Google+ Basic Square
bottom of page