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Federal interest rate hikes will price buyers out of Utah housing market, realtors say

Posted at 9:37 PM, Mar 17, 2022
and last updated 2022-03-18 07:59:27-04

SANDY, Utah — Brock Whitworth listed his home in Sandy just this morning.

“I clicked the button to go live today," he said.


Within hours, more than a dozen showings were scheduled.

“I would love to have it under contract next week," said Whitworth.

The real estate agent had been thinking about selling for about two months, he said.

"Just the way the markets been, we thought maybe we'll try to catch this little upswing and see where that takes us," said Whitworth. "I work a lot with people on the other side of purchasing homes, and so it's nice to be on this side of selling a home.”

Read - Housing Authority of SLC receives federal boost to expand affordable housing

This homeowner is one of the few in Utah who are selling, said Steve Perry, President of the Salt Lake Board of Realtors.

“We just ran out of houses," he said. “We're selling homes all throughout Utah, in remote places that we never sold before.”

Right now, first-time homebuyers aren’t even being considered for houses, and it's nearly impossible for them to purchase even condos and townhomes.

“I pulled the numbers from the MLS active homes in Salt Lake County," he said. "There are 388. It should be thousands."


However, inflation is already making the market less competitive, with rising home prices and interest rates pricing out buyers. The median price for a home sold in February of 2021 was just over $413,000,

This past February, the median price went up 25 percent in just one year to $580,000, according to data from the Board of Realtors. The only solution is to build more houses, Perry said, but it's not that simple.

“We all have to get together and agree that we want to fix this," he said. "The cities have to agree to allow more high density homes, the townhomes, the condos. They need to be built, because you can build those faster, and you can put more in an area, where instead of just a few houses. The not-in-my-backyard scenario where 'We don't want that built here, you can build it over there,' that's got to change.”

In this seller’s market, the only type of buyer benefitting right now is the current home owner, like Whitworth, said Perry.

“That current homeowner can take all that equity and then reinvest it in another property and have a rental that they may never have had before," he said.

Whitworth’s home is listed for almost $700,000, which is much higher than what he bought it for, he said. He has confidence it will sell fast.

“Interest rates do kind of worry me," he said. "But at the same time, here in the valley there's just not enough homes for sale.”

Although demand for housing has been declining over the past nine months, the Board of Realtors expects home prices to continue to climb in Utah for at least the next three or four years.