Utah home prices tip down again amid worst housing market affordability in 4 decades
After six straight months of growth, home prices in most of Utah’s Wasatch Front counties have ticked down slightly, marking a turning point as the summer housing market gave way to even more of a slowdown as mortgage rates hover relentlessly high.
In Salt Lake County, Utah’s most populated, the median price of all home types fell to $520,000 in August, a nearly 1% drop from a year ago and a nearly 2% decrease from July. For single-family homes, that figure dropped to $600,000 in August, also down 1% from the price tag of $604,000 a year ago and a 2% decrease from $610,000 in July.
That’s according to the latest housing data release from the Salt Lake Board of Realtors, which also shows the toll high mortgage rates have had on sales. In Salt Lake County, transactions on all housing types plummeted almost 11% since last year, down to 1,117 sales in August compared to 1,253 last year.
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The slight price dip in August is a sliver of good news for homebuyers, whose budgets have been stretched as home prices have stuck stubbornly high this summer, even as over 7% mortgage rates have brought the worst affordability challenges since the 1980s.
“Owing to a scarce inventory and surging mortgage rates, homebuyers are grappling with the most challenging affordability issues in almost four decades,” said Jessica Lautz, vice president of research and deputy chief economist at the National Association of Realtors.
What’s happening in Utah’s housing market?
Even though August’s prices ticked down slightly, it’s important to put that trend into perspective.
Over the past five years, Utah’s home prices surged by 72%, according to the Federal Housing Finance Agency. In the two-year period from 2020 to 2022 alone, the median sales price of a home in Utah rose almost 50%, up from $336,300 in February of 2020 to $500,000 the same month in 2022, according to estimates from the University of Utah’s Kem C. Gardner Policy Institute.
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Utah’s home prices are also still up significantly from a trough seen this past winter, after prices corrected downward when mortgage rates began rising rapidly in June 2022 amid the Federal Reserve’s fight with inflation.
After eight months of declines, Salt Lake County’s median single-family home price bottomed in January when it settled at $535,750.
Since then, prices have been on a slow upward trajectory as buyers who could afford to stomach high rates kept the market moving. Despite high rates, demand for housing remained “robust, fueled by both in-migration and births,” and home prices climbed again before peaking at $610,000 in July, according to the Salt Lake Board of Realtors.
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However, that trend changed in August. Spring and summer buyer demand looks to be winding down, and more buyers may have hit their price ceiling. The housing market usually fluctuates with the seasons, but the high interest rates could bring a chillier fall market than usual.
Will Utah home prices go down even more?
It’s possible Utah’s home prices will fall further this year, but just how low they could go depends on what happens with mortgage interest rates and the national economy.
Nationally, some firms are predicting U.S. home prices will tip back down, while others are expecting them to continue to climb. Much of it depends on whether the Federal Reserve is able to pull off a “soft landing” to avoid a major recession. Fannie Mae is continuing to predict a mild recession as the “likeliest outcome” in 2024.
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Utah home prices
Here’s a county-by-county breakdown of the median price of certain home types as recorded in August by the Salt Lake Board of Realtors:
Salt Lake County: $520,000 (all types), $600,000 (single-family homes), $420,000 (multi-family). That’s down from last year’s August prices: $525,000 (all types), $604,000 (single-family), $425,000 (multi-family).
Utah County: $500,000 (all types), $590,000 (single-family), $395,000 (multi-family). That’s down from last year: $515,000 (all types), $600,000 (single-family), $515,000 (multi-family).
Davis County: $518,000 (all types), $550,000 (single-family), $393,000 (multi-family). That’s down from last year’s prices: $527,000 (all types), $558,000 (single-family), $388,000 (multi-family).
Weber County: $435,000 (all types), $467,000 (single-family), $350,000 (multi-family). That’s up from last year: $419,000 (all types), $450,000 (single-family), $345,000 (multi-family).
Tooele County: $450,000 (all types), $455,000 (single-family), $350,000 (multi-family). That’s down from last year: $460,000 (all types), $474,000 (single-family), $380,000 (multi-family).
