Making Sense of Utah’s Rising Housing Costs (For Buyers and Sellers)

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Homeownership is appealing to many.  Unfortunately, property prices have surged in many US states over the last decade.

In Utah, housing rates continue to climb; home prices in August 2024 rose by 3.9% compared to last year, with a median price of $548,300. But despite this increase, only 22.1% of homes sold above list price, reflecting a 3.5-point drop from last year.

Meanwhile, price drops have become more common, with 36.7% of homes experiencing markdowns, up from 34.0% the previous year. The sale-to-list price ratio also saw a slight decline to 98.8%.

With rising home prices and frequent markdowns, Utah’s housing market presents challenges and opportunities for buyers and sellers. This article aims to help involved parties understand these shifts and provides strategies to navigate Utah’s increasingly competitive housing market.

An Overview of Utah’s Housing Market

While many factors affect property prices, most experts attribute the following to explain why Utah’s housing costs have been climbing.

1. Low supply, high demand

Utah’s housing market is grappling with a classic supply-demand imbalance. Despite many buyers looking for homes, the limited inventory pushes prices up. Here’s a closer look at the current trends affecting the market.

  • The number of homes sold in August 2024 was down 4.3% year over year, with 3,295 sold compared to 3,444 in August 2023. (Redfin)
  • The median days on the market increased to 44, up by seven days from last year. (Redfin)
  • Newly listed homes dropped 6.3% year over year, with only 4,376 new listings. (Redfin)
  • With an average housing supply of just three months, the market remains strongly tilted in favor of sellers, as a balanced market typically requires six months of supply. (Redfin)
  • Utah Governor Spencer Cox aims to build 35,000 new starter homes by 2028 to address Utah’s housing supply issues. (Axios)
  • To keep pace with projected population growth, Utah must construct approximately 27,900 housing units annually. (Utah News Dispatch)

2. More competition

The influx of new residents and strong population growth in Utah have intensified competition for available homes, significantly shaping the market dynamics. Here are the numbers.

  • Utah’s population grew by 21.8% from 2010 to 2022, much higher than the national growth rate of 7.7%. (USA Facts)
  • In 2023, 56% of Utah’s population growth came from people moving into the state. (The University of Utah, 2023)
  • By 2060, Utah’s population may increase by 66% and reach approximately 5.5 million residents. (The University of Utah, 2022)

3. High interest rates

Mortgage rates substantially impact home affordability, and Utah is no exception. With current rates affecting buying power, understanding the trends in interest rates is crucial for prospective buyers. Here’s an update on current rates.

  • As of Sept. 12, 2024, mortgage rates in Utah are 6.63% for a 30-year fixed mortgage and 6.13% for a 15-year fixed mortgage. (Bankrate)
  • After peaking near 8% in October 2023, rates have fallen below 7% and may gradually decrease throughout 2024, depending on inflation and Federal Reserve decisions.

What These Mean for Home Buyers and Sellers

The rising mortgage rates in Utah’s housing costs, high demand, and limited supply presents unique challenges and opportunities.

On the one hand, it might be a good time for property owners to sell their houses because there are more buyers than available homes. On the other hand, this often leads to bidding wars, where sellers can get offers above the asking price. While the market is hot, sellers should set realistic prices that buyers can afford to attract serious offers.

The high Utah housing rates mean higher monthly payments for buyers, which can reduce affordability. You won’t likely have this problem if you’re inheriting a house, but an environment like this might make finding a home within your price range challenging. 

If you’re not in a hurry, waiting until the market reflects lower interest rates might be wise. Patience might provide better opportunities and more favorable conditions for purchasing a home.

Future-Proof Your Real Estate Strategy

Utah’s housing market is buzzing, but it’s not without hurdles. Home prices are rising, inventory is tight, and mortgage rates are climbing, making it a tricky landscape for buyers and sellers.

While sellers can benefit from high demand and competitive bids, buyers may need to be patient and strategic to find the right opportunity. After all, real estate is a major financial commitment. Thankfully, you don’t have to worry about how you can find the best deals.

With so many factors at play, having an expert guide can help you navigate the complexities and make smart decisions. Whether you’re looking to buy, sell, or get the best advice on your next move, partnering with a knowledgeable advisor can be invaluable.

Ready to get started? Check out how our advisory services at Tencap Wealth Coaching can provide the insights and support you need. Also, read the reasons why our advisory services are worth the fee. We can help you make the most of your real estate journey.

The information contained herein should in no way be construed or interpreted as a solicitation to sell or offer to sell advisory services to any residents of any State other than the State of Utah or where otherwise legally permitted. All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Nor is it intended to be a projection of current or future performance or indication of future results. Moreover, this material has been derived from sources believed to be reliable but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed. Purchases are subject to suitability. This requires a review of an investor’s objective, risk tolerance, and time horizons. Investing always involves risk and possible loss of capital.

Nick Carrigan Standing
Nick Carrigan
Wealth Advisor |  + posts

Nick trains and develops families in creating, maintaining, and growing wealth. This includes educating clients on the science and academics of investing, comprehensive financial planning, and ongoing coaching to ensure discipline for a lifetime. Nick has seen this create incredible levels of freedom, fulfillment, and love for the families he works with.

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