Comparing housing market metrics from one year to another is challenging because there are so many variables to consider. The last few years have been abnormal in so many ways–pandemic, federal fiscal stimulus, and supply chain issues, to name just a few–throwing the ordinary metrics into disarray. Many real estate industry reports are calling 2020 and 2021 “unicorn years” due to the intense competition for limited inventory coupled with historically low interest rates.
This unsustainable pattern started to shift when interest rates climbed sharply between January and October of 2022. As we predicted at the start of 2023, increases in mortgage rates and home prices have stabilized over the first half of the year.
Rates for a 30-year conventional loan (without a buy-down) are currently hovering around 6.875%; VA at 6.375%; Jumbo 7% and FHA 6.125%. While these rates are higher than during the rock-bottom “unicorn years”, they are still relatively low compared to the fifty year average of 7.74%.
Buyers and sellers are adjusting to this new normal. In 2023 we’ve seen the inventory of homes for sale DROP. Homeowners are reluctant to sell when it would cost them the low mortgage rates they locked in a few years ago. However, buyers maintain a strong interest in the market. There has been a marginal increase in the supply of newly built homes as supply chain disruptions are evening out. The spring and summer seasons always welcome more activity in the real estate market. The local market typically peaks between March and July and our brokerage’s activity has been in line with this trend.
Niche Homes has been delighted to work with many clients moving to Utah from around the country. It’s exciting to support clients in their choice to call Utah home. According to US News Utah was ranked as the nation’s number one economy and, according to WalletHub, the best state to start a business. Utah also boasts the highest home price appreciation in the nation since 1991, increasing on average 587.96%! As a homeowner, you gain equity as you make your monthly payments while home prices appreciate with time. You should be receiving monthly home value reports which are an effective way to keep an eye on this appreciation.
As always, contact us with any questions about the current state of the market.