Home prices up, sales down in Salt Lake CountyJan 05, 2024 10:13AM ● By Darrell Kirby
Homes are sitting on the market longer in West Valley City because of high prices and interest rates. (Darrell Kirby/City Journals)
Despite the headwinds of high mortgage rates and housing prices that have pushed many potential buyers to the sidelines, homes in Salt Lake County saw slight uptick in prices in the third quarter.
Figures released by the Salt Lake Board of Realtors show the median price of a single-family home in Salt Lake County increased slightly to $594,125 during the period of July through September. That’s up 1% from $589,900 in the third quarter of 2022. The increase in prices came amid mortgage rates that hovered around 7% for much of the period.
“This is why we have seen home sales decline across the Wasatch Front over the past 18 months,” Salt Lake Board of Realtors chief economist Dejan Eskic said in a press release.
Single-family home sales totaled 2,103 units in the third quarter, a decline of 11% from a year earlier. Weber, Davis, Utah and Tooele also saw a drop in homes sold during the third quarter.
The average time single-family dwellings were on the market during the quarter was 27 days, up from 22 days in 2022.
Condominiums in Salt Lake County saw a 1% decrease in median prices to $410,000 but, again, pesky mortgage rates on top of the high asking prices pushed sales down 4% during the third quarter.
In West Valley City, for example, the slowdown in home sales was more pronounced than in the county in general.
In ZIP code 84119, which encompasses the eastern third of the city, single-family home sales went from 100 in the third quarter of 2022 to 73 in the same quarter of this year for a decline of 27%. The media price also fell 5% from $420,500 to $400,000.
ZIP code 84120 in the central part of the city saw a 15% drop in sales—92 units to 78—as the median price went from $450,000 to $447,450. ZIP code 84128 covering the northwestern part of the city also trended downward in home prices and sales.
The good news for buyers is that mortgage rates were at their lowest level in early December than they were for a number of weeks. After pushing 8% in late October, they had dropped to 6.625% to 6.875% in early December for a fixed rate on a 30-year loan at some of the larger local financial institutions, giving potential buyers the opportunity to see a significant savings in their monthly payments than just weeks earlier.
“We’re starting to see more potential buyers interested,” said Austin Roberts, a loan officer at City Creek Mortgage. He added that with a decline in rates approaching 1.5%, buyers of a home around $500,000 would see their payments drop by around $500 a month. “It is absolutely a material change and increases affordability for home buyers.”
Lower rates could attract more people back to the housing market. Conversely, that additional competition for housing could help push up prices and negate the savings of lower rates.
According to a recent report in U.S. News & World Report, economists expect home loan rates to stay at 6% or higher through 2024. Rates below 6% could return in 2025. Roberts concurs with the near-term forecast for rates. “I think (mortgage) rates will steadily decline as the Federal Reserve cuts rates next year,” he said. “I think we will definitely have lower rates within the next year.” λ