Learn more about the housing market in Utah

Every state is unique when it comes to the real estate market. That’s why it’s critical to understand the market you live or operate in. Whether you’re renting, buying, or selling, it will impact many aspects of your life. 

Utah Housing Market Overview  

Also known as the Beehive state, Utah is known for its beautiful parks like Zion and Bryce and many breathtaking landscapes. Some of its largest cities include Salt Lake City and Provo. 

According to data from IBISWorld, Utah had a GDP of $185.2 billion in 2022 and a population of over 3 million. This means that its growth rate for GDP over the 5 years leading up to 2022 was first out of every state in the nation. The population growth rate in those same 5 years was second in the nation. 

At the beginning of 2024, real estate experts predicted that Utah housing prices that had risen all throughout 2023 would continue to rise and would also see a steady increase in the number of homebuyers. Utah home prices have seen a substantial increase of +3.8% over the past year due to factors such as limited inventory, a robust job market, and low interest rates. As of May 2024, this seems to be the case, as other publications recognize that prices are continuing to increase, and demand outpaces supply. Utah housing trends show brisk sales and rising prices, particularly in communities near the larger city and metro areas. This signifies an imbalance created by steadily rising demand with supply that cannot keep up. 

Experts in the same article predicted that interest rates that were approaching 8% at the end of 2023 would stabilize by the second half of the year but remain over 6%. According to Bankrate this prediction has somewhat come true, as interest rates in Utah have started to stabilize around 7%, which is closer to the national average. Based on these changes, the housing market in Utah may be expected to stabilize a bit on other fronts as well. The Utah housing supply has increased in response to the high demand, but the market remains tight with homes selling quickly and at competitive prices. 

Utah Housing Market Trends  

To understand the Utah real estate market, it’s important to keep up with trends such as the average price and rate of rising property prices in Utah. The increase in housing supply is significantly impacting the market dynamics, indicating shifts in supply and demand for housing. Let’s look at some key real estate trends in Utah: 

Note: These statistics are based on Redfin’s monthly housing data from May 2024. 

Median Home Price  

The median price of a home in Utah as of April 2024 was $543,600, according to Redfin’s monthly housing market data. This is an increase of 3.1% year-over-year.   

The list price plays a significant role in competitive market dynamics and seller dominance, with many homes being sold above or below the list price depending on the market conditions.  

Number of Homes Sold in May 2024 

3,550 homes were sold in Utah in May 2024, which is a 3.6% increase from the previous year. Though this suggests an increase in inventory throughout the year, this number falls considerably short of numbers seen in the summers of 2021 and 2022.   

When looking at this statistic, it’s important to keep in mind that nationally speaking, sales usually peak during the spring and summer months and slow in the winter. In fact, the National Association of Realtors (NAR) predicts that in February and March alone, sales activity increases by as much as 34% and prices by 3%.   

Median Days on Market (DOM) 

Days on market (DOM) is a measure of the average length of time a home remains listed on the market before being put under contract. A lower DOM signals a highly competitive seller’s market with more pressure on buyers to make higher offers and remove contingencies. This indicates limited inventory and high demand, benefiting sellers in negotiations. A higher DOM signals a buyer’s market as sales are slower and sellers have less leverage. 

The median DOM in Utah in April 2024 was 35 days, which is up from 3 in May 2023. This means that on average, listings spend a little over a month on the market before they are purchased. 

New Supply Statistics 

In May of 2024, Utah had 14,727 homes for sale with 5,326 new listings. The total number of homes went up 11.4% year-over-year and new listings increased 7.9% year-over-year. With 3 months of supply, Utah is just below the 4-5 months of supply experts typically point to as stable. This data seems to show that Utah’s market is indeed stabilizing a bit.  

Property Tax Rate 

According to Rocket Mortgage, the average property tax rate in Utah is 0.57%. This is lower most other states in the country. However, tax rates are likely to vary depending on the value of a home and its location in the state.   

Foreclosure Rate in Q1 of 2024 

In the first quarter of 2024, 1 in every 1,897 homes in Utah experienced a foreclosure filing, according to recent data from ATTOM. This is close to the middle of the pack compared to all other states.  

Hottest Local Markets in Utah  

Here are a couple of the top local housing markets in Utah for 2024, where the median sale price provides a benchmark for understanding the overall price trends within the housing market:  

1. Salt Lake City

Salt Lake City is the most populous city in Utah by a significant margin. The capital is home to a robust economy and a diverse tourism scene reliant on skiing, outdoor recreation, and religious tourism. Though its median home price decreased 1.2% from May 2023 to May 2024 to $593,000, the number of homes sold in the state saw an increase of 7.7% in May 2024. Salt Lake City is a buyer’s market with supply outpacing demand in June. Some of the most popular neighborhoods in Salt Lake City include Liberty Wells, The Avenues, and East Central.  

2. Provo

Provo is another city in Utah known for its picturesque landscapes, history, and nature. The city saw a 1% increase in median home sale prices between May 2023 and 2024 for a new median price of $446,395. Its median DOM increased to 27 days in May 2024, and while that increase suggests a shift in buyers’ favor, it’s important to consider that a relatively lower number still suggests a very competitive seller’s market.   

Economic Factors Impacting the Utah Housing Market  

A holistic view of Utah’s housing market requires a basic understanding of the main economic drivers affecting the market. Let’s take a look at a few critical ones below:  

Mortgage Rates 

Mortgage rates are a common cause of concern for would-be homeowners across the U.S. in 2024. As previously mentioned, Bankrate lists Utah’s current 30-year fixed-rate mortgage average is at 7% (July 2024), which hovers just above the national average. As predicted, this number has settled when compared to the numbers seen towards the end of 2023.   

Inflation and Cost of Living 

Mortgage rates are tied to inflation, another massive contributing factor to the affordability of housing and the state of housing markets in general. Inflation has increased the cost of living for many across the U.S., including in Utah. This means fewer people can truly afford to limit housing costs to less than 30% of their monthly income.   

Population Changes and Demographics 

A changing population can also have implications for the housing market. According to the U.S. Bureau of Labor Statistics, the unemployment rate in Utah, 2.9%, which is low compared to the rest of the country. This low unemployment rate suggests a thriving and healthy economy that is bound to help the housing market in the state.   

Utah Housing Market Forecast 2024  

As previously mentioned, multiple sources considered the appreciating housing market Utah faced in 2023 and made specific Utah housing market predictions (2024) that prices would continue to rise throughout the year. This has proven true over the year, although steadying interest rates and a hope for increased supply in the housing market signified by an increase in sales could indicate a slowing growth in prices.   

These factors can have significant implications for buyers, sellers, and the overall housing market. Sustained changes in home prices may indicate broader market challenges and affect affordability for buyers or opportunities for sellers.  

Likelihood of Utah Housing Market Crash  

While Utah is one of the leading states in home ownership rates, younger people are facing major housing issues. In 2022, according to Federal Reserve Economic Data, only 12% of homes were affordable to households earning a median income. This is down from 45% in 2020. So, even though experts don’t think a housing crash is imminent, the market leans heavily toward sellers and there aren’t strong beliefs that will change too much anytime soon.  

Forecast for the U.S. Housing Market  

Now that we’ve looked at Utah’s housing market, let’s zoom out a little bit. What about the U.S. housing market? What do you need to keep an eye on in the coming years?   

The United States’ current median existing-home sale price is around $384,500 per the National Association of Realtors. The inventory, though, remains low. A balanced market typically has a 5-to-6-month supply, but the current figure is 2.9.  

We’re currently in a seller’s market with buyers looking at continued rising house prices. Sellers have the upper hand in negotiations due to rising prices, limited inventory, and strong demand. The same trend can be seen with renters. Housing continues to appreciate, in general.  

Dr. Lawrence Yun, Chief Economist and Senior Vice President of Research, National Association of Realtors, believes the housing market will appreciate 15 to 25% over the next five years. He thinks that the seller’s market will continue because housing inventory will remain low. In five years, however, he predicts a more balanced market, in which neither party has a built-in advantage. Thus, the market will shift to a case-by-case basis to determine what kinds of deals people can get.   

Hybrid work also impacts the housing market. This shift in work culture means suburbia will continue to grow. States like Texas, the Carolinas, Tennessee, and Florida should see continual growth.   

The number of single-family homes built decreased over the past couple years while the number of multi-family homes increased due to lower prices and a demand for affordable housing. Higher mortgage rates and inflation (affecting price of materials) were the main causes.   

Lower income households continue to struggle in the current housing market. This trend appears likely to continue into the foreseeable future. Without enhanced supply or helpful subsidies, the outlook is that many Americans will still wrestle with housing affordability in the years to come.  

Utah Rental Market  

The rental and buying market are obviously closely linked. When home prices fall, landlords are more likely to buy properties to rent out. Home prices and rental prices are correlated as well because a hot market means prices rise.   

Rents were more unaffordable than ever in 2021 and 2022. In 2022, 22.4 million households paying rent said it was unaffordable, which is the highest that figure has ever been, according to a January report from the Joint Center for Housing Studies at Harvard University. The study found that half of all renters in the United States spent over 30% of their income on rent and utilities.   

The markets cooled in 2023, though, due to new units and decelerating demand. But a serious problem persists: Rent increases are still outpacing income gains.   

Moreover, high interest rates are keeping borrowing and transaction activity down. Over half the banks surveyed by the Federal Reserve reported that demand for multifamily loans decreased year-over-year.   

The pandemic caused a housing disparity that isn’t going away anytime soon. Unaffordable housing is a serious issue across America. Whether high rents or low income is the main cause doesn’t change the fact that this problem is widespread.  

While these factors impact Utah’s rental market, they don’t dominate it. Below are just a few of the current trends for Utah’s rental market based on data pulled from Zillow:  

Utah Rental Market Key Trends 

• Median rent: $1,850  

• Month-over-month rent change: +$5  

• Year-over-year rent change: -$100  

• Available rentals: 5,353  

Conclusion  

The diversity of Utah’s industries and environments means that its average housing market statistics are pulling from a mix of urban and rural populations, where the housing market is experiencing very different conditions. But the state’s market continues to stabilize while pointing to a slow in its rapid growth. Experts and analysts will continue to monitor this market, as well as nationwide factors like interest rates and new construction.