Blog Post

Insight: Where Does Utah’s Housing Market go from Here?

By: Dejan Eskic

Note: The opinions expressed are those of the author alone and do not reflect an institutional position of the Gardner Institute. We hope the opinions shared contribute to the marketplace of ideas and help people as they formulate their own INFORMED DECISIONS™.

Mortgage rates have increased from 3.76% in February to 5.23% in May, one of the most drastic increases on record in such a short timeframe.[i] Historically, with rising rates we see prices starting to moderate or even stall. However, Utah’s housing prices increased 24.4% between April 2021 and April 2022, all while rates increased from 3.06% to 4.98% in the same period.[ii]  What’s more shocking is that the median monthly mortgage payment increased from approximately $1,629 to $2,556, rising 56%. What’s even more shocking is that our median days on market is six days![iii]

Low mortgage rates masked the increase in housing price growth for a while. From mid-2018 through the beginning of 2021, the monthly payment stayed relatively unchanged, while prices increased about $73,000 (see Figure 1). Since early in 2021, however, the monthly payment growth has outpaced the growth in prices. So, what can we expect for housing prices going forward?

Figure 1: Monthly Median Sales Price and Monthly Median Payment in Utah

Note: Monthly payment assumes corresponding average 30-year fixed mortgage rate and a 10% down payment.

Source: Kem C. Gardner Policy Institute calculation of and Freddie Mac Primary Mortgage Survey.

Currently, housing price forecasters indicate national prices will likely in