Mortgage interest rates fell again in late January to 6.15 percent, the lowest since September of 2022, according to Freddie Mac, and rates are predicted to fall to 5.5 percent this spring, Lawrence Yun, chief economist of the National Association of Realtors, told Realtors in Salt Lake City recently.
“The spread between the 10-year Treasury and the 30-year mortgage rate is exceptionally wide,” Yun told members of the Salt Lake Board of Realtors during a January visit to Salt Lake City. “If we had a narrowing, or say, a normal spread condition, today’s mortgage rate would be 5.5 percent.”
Meanwhile, the median single-family home price in Salt Lake County settled at $541,900 in December, 6 percent lower than the median price in December 2021. It was the first year-over-year price decline since 2011.
From March 2020 through May 2021, the pandemic spurred a home-buying rush. This caused the median single-family home price to jump nearly 60 percent in Salt Lake County. The median single-family home price peaked in May 2022 at $650,000. Since then, home prices have fallen 17 percent.
“Home buyers have more negotiating power,” said Rob Ockey, president of the Salt Lake Board of Realtors. “The good news for sellers is that, despite the recent price declines, a majority of homeowners are sitting on plenty of equity. A large majority of homeowners don’t need to sell. They can step back and wait for the dust to settle.”
Home-price declines will likely be tempered by a lack of housing. The University of Utah’s Kem C. Gardner Institute estimates that there is a 31,000-unit deficit of new homes in Utah.
“Demand for housing is strong because of net in-migration and population increase,” Ockey continued. “More than one-third (38 percent) of all active listings on UtahRealEstate.com are under contract, which indicates there is still strong buyer demand in our market.”
In December, the median time a home was on the market was 41 days, up from 9 days a year earlier.
Sales of all housing types fell to 761 units in Salt Lake County, down 50 percent compared to 1,508 sales in December 2021. Home sales in 2022 in Salt Lake County totaled 13,087, down 26 percent from 2021, the steepest single-year drop on record (1997 to the present).