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17 min read Nov 01, 2022

Utah Real Estate Market: Will it Crash in 2023?

Utah-Real-Estate-Market

The Utah housing market is amid a major shift. The median sale price was up 5.6% in September 2022 Y-O-Y, but the number of homes sold dropped 26.7%.

As mortgage rates are at record highs in 20 years by 7.08%. Sellers are reducing prices as homes stay on the market longer. Buyers finally have market power.

Now that the housing market Utah is threatened by a similar instance of rising mortgage rates and the possibility of a recession, buyers and homeowners are asking a familiar question: When will the housing market crash in Utah?

What is Real Estate Housing Market

A real estate housing market or real estate market refers to a network of buyers and sellers looking to buy and sell real estate.

» Is real estate housing market slowing down in UT? Yes! Learn what happens to the Utah housing market during a recession.

1. Utah Median Home Prices

Over a given period, the median house price is the middle sale price among all homes ranked from highest to lowest.

» Current Housing Market Trend 2022: In September 2022, median home prices in Utah were up by 5.6% compared to the last year.

2. Inventory 

Inventory or Homes for sale refers to the number of unsold residential and commercial real estate units.

» Current Housing Market Trend 2022: The supply of homes remains historically low, according to Lawrence Yun, NAR Chief Economist and Senior Vice President of Research. In September 2022, the inventory of unsold existing homes stood at 3.2 months.

3. Homes Sold

The Total number of properties sold during the period.

» Current Housing Market Trend 2022: Nationwide, fewer existing homes are selling. According to the September Redfin data, the seasonally adjusted total figure for 2022 decreased from 6.49 million in January to 5.1 million in September. 

Bringing it to an all-time low of 26.7% compared to the last year.  

4. Median Days on the Market

The median number of days property listings spend on the market in a given geography during the specified month. 

» Current Housing Market Trend 2022: The median days on the market was 39 days, up 13 year-over-year.

5. Mortgage Interest Rates

Lenders on a mortgage charge interest rates. They can be fixed, remaining constant over the loan term, or variable, fluctuating with a benchmark interest rate.

» Current Housing Market Trend 2022: The national average 30-year fixed mortgage rate is at 6.1% and up 3.2 points year over year.

6. Mortgage Application Rates

The number of mortgage applications received compared to the previous year. A mortgage application is a document submitted to the lender to buy real estate properties.

» Current Housing Market Trend 2022: Mortgage applications were 41% lower than a year ago.

7. Foreclosures

Taking possession of a mortgaged property when the mortgagor fails to make mortgage payments.

» Current Housing Market Trend 2022: 21,869 U.S. properties started the foreclosure process in September 2022, down 9 percent from the previous month but up 113 percent from a year ago.

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Factors Affecting Utah Housing Market

Several parameters affect the real estate housing market Utah prices. To summarise, these factors are broadly categorized into 4 key segments.

1. Mortgage Interest Rates

Mortgage Interest rates significantly impact the current Utah real estate market. These rates have priced many buyers out of the market as they’re at record highs in more than 20 years.

Interest rates and home prices share an inverse relationship.

The cost of obtaining a mortgage decreases as soon as the interest rate does, which increases demand for real estate and raises home prices in UT.

2. Economy

The Utah housing market varies by the overall health of the economy. Economic indicators include GDP, employment ratio, manufacturing activity, the prices of goods, etc.

The country’s economic power directly affects the housing markets in the US. 

3. Demographics

It defines the composition of the population based on age, race, gender, income, migration patterns, and growth. 

Demographics make it easy to determine what types of real estate properties are in demand. 

Major changes in a country’s demographics can have a long-term impact on current Utah housing market trends.

4. Government Policies

Tax credits, deductions, and subsidiaries are a few factors that can impact the demand for real estate.

Understanding current government policies can help you predict the demand and supply and identify potentially false Utah real estate market news.

Current Utah Housing Market Statistics

  • According to ATTOM Data Solutions, 34,501 U.S. homes had foreclosure filings — default notices, scheduled auctions, or bank repossessions — as of August 2022.
  • According to ATTOM, Illinois had the highest foreclosure rate in August, with one foreclosure filing for every 1,926 housing units. Delaware was next, with one out of every 2,387 homes in some stage of foreclosure.
  • In August 2022, lenders repossessed 3,938 properties in the United States through completed foreclosures, also known as “real estate owned,” or REO. According to ATTOM, Illinois had the most REOs (493), followed by New York (337).
  • For the eighth month, existing-home sales declined to an adjusted annual rate of 4.71 million. Sales decreased 23.8% from the prior year and 1.5% from August. Also, The median price of an existing home sold increased to $384,800, an 8.4% increase from a year ago.
  • According to the NAR, the rate of home appreciation from August 2021 to August 2022 was 7.7 percent.
  • According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.11% in September, up from 5.22% in August. The average commitment rate across all of 2021 was 2.96%.
  • In September, pending home sales fell for the fourth consecutive month, falling month over month by 10.2% and year over year by 31.0%.
  • Housing affordability declined significantly in Q2 2022, as the monthly mortgage payment on a typical existing single-family home with a 20% down payment increased nearly a third from the first quarter of this year and a half from the previous year.

For Home Buyers

Sr. No. Real Estate Market Statistics
1
26% of home buyers were first-time home buyers with a median age of 26.
2
A typical homebuyer financed 94% of the home price.
3
A real estate agent or broker was used by 86% of buyers to purchase their homes.
4
% of Home buyers found their home via:

Online: 51%, Real Estate Agent: 29%, Yard Sign: 4%, Friend or Relative: 10%, From Seller: 5%, Home Builder: 1%, Print Media: 1%
5
89% of Buyers said they would go with their real estate agent again or recommend them to others.

For Home Sellers

Sr. No.Real Estate Market Statistics
1
When it came to selling their home, 86% of sellers used the services of a real estate agent.
2
Recent sellers typically received 100% of the listing price, and 38% reported lowering the asking price at least once.
3
The average sold home was on the market for two weeks.
4
Friends or family referred 36% of sellers who used a real estate agent, and 27% used the agent with whom they previously worked to buy or sell a home.
5
73% of Sellers said they would use the same agent again.

Should I Buy a Home Now or Wait?

Yes, if you are in a stable financial position. 16% of respondents said now is a good time to buy a house.

Buying a home is the biggest investment opportunity for most people in their lifetime. Before you begin, make sure you have a solid financial condition.

A buyer is required to make a sound decision based on their needs, budget, and research. 

Before proceeding, buyers must calculate their monthly housing costs using a mortgage calculator.

» How to Buy a House: Own the Home Meant for You!

Tips for Buying a Home in a Hot Market

1. Increase Your Earning Potential 

To buy or finance a house, it is necessary to be in a stable financial condition. Despite the economic downturn and rising mortgage rates, you must look for opportunities to boost your income.

60% of workers who switched jobs last year earned more money in their new positions, beating inflation.  

2. Lower Your Debt

Lowering your debt-to-income ratio will help you easily qualify for a mortgage preapproval when applying for a loan.

If you have bills to pay, such as credit card balances, student loans, or asset installments, it is always better to clear them before making a huge commitment.

3. Target Local Markets 

The Utah housing market is highly localized as market trends vary from region to region.

Also, the buyer closing costs depend upon each state and cost up to 4% to 5% of the home selling price.

To get the top dollar value for your money, it’s beneficial to focus on the local housing market in Utah.

» Buyer Closing Cost Calculator: Evaluate the approximate closing costs for buyers in your area.

Tips for Buying a Home in a Slow Market

1. Don’t Buy at the Lowest Price

The Utah housing market starts to slow when the properties’ supply exceeds the present demand.

As a result, sellers have to lower the prices of their homes. However, you shouldn’t buy a home because it’s the cheapest.

A seller may conceal the need for major repairs. These renovations may inflate the home’s value. A home inspector can help the buyer inspect the property thoroughly.

» Best Home Inspectors in the U.S: Check out the best home inspectors available in your area.

2. Consider the Value of the Property

A slow market is the buyer’s market.

There is a high chance that the home’s value may decrease before it starts to increase again. Buying a home might not build equity as quickly as expected.

» Fair Market Value: Want to know what is fair market value and how is it calculated?

3. Do Not Invest in the Properties For the Short Run

If you’re not planning to stay in the real estate property for a long time, do not buy it.

Buying a home solely for selling will only increase inventory. Buyers might consider a mortgage with short due dates and high payments. 

This won’t be beneficial in the long run if the housing market Utah stays slow. A slow Utah real estate market may force buyers to refinance their new homes.

» Best Time to Buy a House: Know exactly when it is best to buy a house!

Should I Sell a Home Now or Wait?

Yes! 51% of homeowners still believe that now is a good time to sell a home.

A few sellers are still in a dilemma considering the slow market, high inventory, decreasing home prices, and increasing mortgage rates.

Sellers can crack a great deal by leveraging high buyer demand.

However, sellers can benefit from selling a house if the following factors favor them.

1. If the Mortgage Interest Rates are Low

Mortgage rates are touching a record high of 7.08% and may rise even further as the Federal Reserve works to control inflation. 

When comparing the data to 1971, the present mortgage rate is moving towards a long-term average of 8% 30-year mortgage rates.

Keeping this in mind, Interest rates are still low, which might lure prospective buyers into entering the market. 

2. If You Need to Relocate

If you’ve got a new job or decided to retire, relocate to a new state. There is no way around selling. The best time to sell a house is when you’re ready to move. 

3. If You Need to Upsize or Downsize

Everyone enjoys their own space, and a growing family often requires more space. Whether you’ve decided to upsize or downsize to live in a low-maintenance home.

A change in family dynamics can significantly impact your decision to sell your home.

🙌 Sell Whenever You’re Ready



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Tips to Sell Your Home in Hot Market 

1. Decide a Way to Sell For Top Dollar: 

It is important to select how you want to sell your house. You can sell your house to cash buyers, IBuyer, or anyone else.

Doesn’t matter if you’re in a hot seller’s market or a slow buyer’s market. Listing on MLS is the best way to sell a house. Almost 90% of buyers are represented by a buyer agent who shares access to the local MLS. 

Listings on the MLS sell 17% faster than those that are not.

» List on MLS: Save on thousands of commissions and list on MLS using Houzeo.com.

2. Make Repairs if Necessary 

To get the highest and best offer on your property, it is necessary to invest in repairs and renovations.

You should also try to clean and declutter your home so prospective buyers can see the living areas.

Making a strong first impression extends to your home’s exterior. It is important to freshen up the curb appeal before potential buyers arrive.

» Creative Ways To Market a House For Sale: Learn how to creatively market your home.

3. Go for Home Staging

Home staging means preparing your home for sale with or without the help of a professional home stager.

Professional home staging largely involves cleaning, rearranging, or renting furniture and other aesthetic tactics to make your home visually appealing.

However, it largely depends on the location and the number of rooms you want to stage.

» How Much Does Home Staging Cost: Home sellers spend $755 – $2,844 on home staging. However, it depends on the location.

Tips to Sell Your Home In A Slow Market

1. Price Your Home Competitively

In a slow market, inventory is usually high, and home prices keep decreasing due to lower demand. It is better to price your home competitively and get the best deal. 

Research comparable house sales in the area and undercut them.

Redfin’s data tells us how a typical home sells for less than the asking price. If you are going to price your home high, there are chances that you may detract potential buyers. 

2. Ease the Deal

Selling a house is not an easy task in a slow market. With mortgage rates at peak, buyers are already resisting entering the market.

You must make the deal look more attractive to sell your house in a slow market. 

Offer financial incentives like covering all closing costs, accepting all inspections, or providing a transferable home warranty.

3. Find a Way to Get the Best Deal

The first and foremost step is to find a medium to sell your house for top dollar. List your property on MLS for the best results.

List your property on MLS for the best results. We do not recommend listing with a full-service Realtor as they charge hefty commissions. 

Realtors provide access to the MLS, but you can skip this and list on MLS via the Flat Fee MLS listing service. 

» Houzeo Reviews: Houzeo is the only Flat Fee MLS service with 5-star ratings from thousands of home sellers!

Utah Housing Market Predictions 2023

Surged mortgage rates and plunged home sales have worried buyers and sellers about the Utah housing market trend 2023. 

Home sales are down by 26.7% year-over-year, and National Avg. 30-Year Fixed Mortgage Rate ranges from 6% to 7.1%.

This indicates that the rate of existing home sales has slowed to its lowest level in 10 years.

Here are a few Utah housing market predictions for 2023 based on the experts’ forecast.

1. Mortgage Interest Rates

Experts predict that mortgage rates will continue to climb because of continued inflation, potential recession, and geopolitical tensions.

Financial market participants anticipate the Fed raising its target Fed funds rate by 175 to 200 basis points from current levels.

This will roughly average the 30-year and 15-year mortgage rates at 8.50 and 7.70, respectively. 

Some experts also believe that the 30-year and 15-year mortgage rates could drop to 6.0 percent and 5.25 percent, respectively. If the federal reserve successfully keeps inflation under control and eases up on its impulsive rate increases.

2. Home Sales

Increasing mortgage rates will surely have a major impact on home sales in 2023.

With the observed trend, higher interest rates could cause a 10% drop in home sales next year.

Home listings will no longer go out of inventory at a faster pace.

Also, the median days on the market might reach up to 35 days or more in the next year, with a current avg of 39 days

3. Home Prices

Some experts predict that due to low inventory, home prices won’t drop in 2023.

While others believe that due to the higher interest rates, sellers will lower their prices to current levels. 

Home values are expected to go down by 5% to 10% due to unaffordability. As the Fed attempts to control inflation by increasing mortgage rates.

4. Housing Supply / Inventory

Before the 2008 housing market crash, the housing supply or inventory peaked at a 13-month supply.

We only have enough for three months, roughly half of what we require.

Homeowners are unlikely to trade in their 3% mortgage for a new home with a 7% loan unless necessary. As a result, there are chances that the housing supply will remain low. 

However, few experts believe that housing inventory will rise as interest rates rise and homes become more unaffordable.

5. Home Affordability

Experts believe that home affordability will not change dramatically.

Home prices may continue to fall but will not be enough to offset the higher interest rate. 

As a result, the monthly mortgage payment will remain high, and homes may look less affordable.

There’s a slight hope that inflationary pressure eases and mortgage rates fall next year, such that buyers may feel less pressure.

Housing Market Predictions for Next 5 Years

NAR Chief Economist predicts that “Mortgage rates will continue to rise in 2023, but within two years rate should return to 5.5% or 6% percent.”

He also anticipates that over the next 5 years, home prices will elevate by 15% to 25%

Next year, there might be a chance that it will be a buyers’ market.

Many sellers waiting for the market to turn around will likely give in and increase the inventory.

He predicts a balanced market in which neither buyer nor seller has a monopoly. Until housing inventory remains low.

But In the long run, the seller’s market will continue.

When Will the Housing Market Crash in Utah?

Economists believe the UT housing market will slow down but not crash soon.

Prices will fall, but not to the extent homeowners experienced during the Great Recession. 

What Causes a Housing Market to Crash?

A housing market crashes when there’s an immense supply of properties and few buyers to purchase. In short, huge supply and minimum demand. 

A housing market bubble starts to form when mortgages are available at low-interest rates, job growth is substantial, and lenders easily avail the loan. 

The bubble pops up when the equation is reversed. 

Final Thoughts

The UT housing market has been red hot since the pandemic, but it is cooling fast. Prices will fall, but not to the extent homeowners experienced during the Great Recession.

The personal balance sheets of homeowners today are much stronger than they were 15 years ago.

A typical mortgage borrower has excellent credit, substantial equity, and a fixed-rate mortgage with a rate well below 5%. As a result, no foreclosure crisis is on the horizon.

Furthermore, builders remember the Great Recession well and have been cautious in their construction pace. Hence, there is an ongoing shortage of available homes for sale by 3.2 months’ supply in September 2022.

Frequently Asked Questions

1. Is the housing market going to crash in Utah?

Economists do not believe that the real estate housing market will crash. According to housing economists, there are five significant reasons why the market will not crash anytime soon: Low inventory, Lack of newly constructed housing supply, Several new buyers, Strict lending standards, and a Drop in foreclosures.

2. What are the most overvalued housing markets in Utah?

The top 10 most overvalued housing markets in Arizona are as follows: Heber-Overgaard, AZ 66.7%, Cave Creek, AZ 26.9%, Saddlebrooke, AZ 23.1%, Coolidge, AZ 18.3%, Marana, AZ 13.6%, Fortuna Foothills, AZ 12.3%, New River, AZ 11.2%, Fountain Hills, AZ 11.1%, Litchfield Park, AZ 9.9%, & Peoria, AZ 9.9%.

3. Will real estate house market value continue to fall?

Yes! If the mortgage rates continue to rise and houses stay on the market for longer, the real estate market value will continue to fall.

Resources for Utah Home Buyers

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