DAVE & DUJANOVIC

Rising interest rates put homes out of reach for 2 of 3 Utah families

Mar 15, 2022, 4:04 PM | Updated: Jun 14, 2022, 9:13 am
Utah airbnb rentals rising interest rates affecting millennial home buyers...
Eviction filings in Utah are on the rise. According to the Rental Housing Association of Utah, there has been a 46% increase in evictions in the first six months of this year compared to the same time in 2021.

Sound up for live discussion on Dave and Dujanovic!

SALT LAKE CITY — As interest rates are expected to begin rising this week, more and more Utah families are watching their dream of owning a home fade. 

As the nation’s average 30-year fixed mortgage rate has risen closer to 4%, a striking 67% of Utah households are being “priced out” of the state’s median-priced home, according to the calculations of Dejan Eskic, a senior research fellow at the University of Utah’s Kem C. Gardner Policy Institute who specializes in housing research.

“It’s bad,” he told Deseret News on Wednesday. “Typically when we see rates rise we do see a slowdown in demand. We see a slowdown in price. Sometimes the price actually falls,” Eskic said.

But in today’s market, don’t expect home prices to fall, he said.

Utah’s median-priced, single-family home was $512,000 statewide in the fourth quarter of 2021, according to the National Association of Realtors.

In January 2022, about 3,051 homes were sold in Utah, down 7.2% from the last January, according to a report published by the Utah Association of REALTORS.

‘Ropes of sand’

Utah real-estate agent Michael McPhie joined KSL NewsRadio’s Dave Noriega and Debbie Dujanovic to discuss what rising interest rates mean for homebuyers and homeowners.

Citing a Board of Realtors report, Debbie said, “The income required to buy a median-priced home in Salt Lake County — ready for this? — $58,000 seven years ago. Now it is over $101,000, ” adding the report states that “Utah is the only state since 1900 or homeownership the homeownership rate has fallen below 60%.” 

“What that tells me is what you could afford on one salary, you now have to have two salaries in the home to afford one,” Dave replied.

“It feels as though our kids are going to be grasping at ropes of sand to get that home,” Debbie said.

More homes being built to ease demand

McPhie said it’s a tough market for homebuyers but also for renters.

“Renters are obviously having a hard time transitioning. About three quarters of renters are priced out,” he said.

McPhie said the good news is new homes are being constructed to help alleviate the supply problem, but “not nearly enough.”

To buy a home today in Utah “is there anything folks can do or is it just suck it up and pay what it costs?” Dave asked.

“I hate to do a shameless plug, but I’ve had to resort to really starting to contribute some of our commission towards our clients to help them cover closing costs,” McPhie said. “We’re having to get really creative with our buyers to get their offers accepted.”

‘Perfect storm’ in Utah real-estate market

“Is there any silver lining at all?” Debbie asked.

McPhie again mentioned new home construction adding to the needed supply of housing units.

“We’re still going to see double-digit home appreciation this year. I don’t really see that changing. I mean Utah’s was kind of a perfect storm here as far as good economy, decent wages and great to come here and grow a business,” he said. “All those things combined with the influx of out-of-state traffic is just really putting super-high pressure on.”

Dave & Dujanovic can be heard weekdays from 9 a.m. to noon. on KSL NewsRadio. Users can find the show on the KSL NewsRadio website and app, as well as Apple Podcasts and Google Play.

We want to hear from you.

Have a story idea or tip? Send it to the KSL NewsRadio team. here.

Today’s Top Stories

Dave & Dujanovic

WNBA star Brittney Griner stood in front of a Russian court Wednesday after being detained for poss...
Curt Gresseth

Two Utah experts talk about prisoner swap for WNBA player Brittney Griner

Two Utah educators discuss prisoner swap for WNBA Brittney Griner.
1 day ago
people are pictured at city creek, shopping habits can be indicative of financial infidelity...
Samantha Herrera

Identifying financial infidelity and learning how to curb it

Some signs of financial infidelity are if you feel like you're spending behind your partner's back and if it's a recurring pattern.
1 day ago
KSL NewsRadio's Dave & Dujanovic discuss how to deal with and overcome seasonal depression....
Mark Jones

How to deal with and overcome seasonal depression

KSL NewsRadio's Dave & Dujanovic discuss how to deal with and overcome seasonal depression.
2 days ago
The world's largest active volcano is shooting fountains of lava more than 100 feet high and sendin...
Curt Gresseth

Watch out for lava glass near erupting volcano, says U. of U. geologist

Hawaii’s Mauna Loa volcano is still spewing lava and shows no sign of stopping. A University of Utah seismologist discusses a phenomenon called lava glass.
2 days ago
shoplifting...
Samantha Herrera

Increased shoplifting puts pressure on retailers and raises prices

Shoplifting is hitting retailers hard this season. Though retailers lose millions in stolen merchandise, offenders usually go without much punishment.
2 days ago
spent...
Elizabeth Weiler

Financial infidelity: What does the Utah data look like?

The average Utahn would 'reconsider their relationship' if their partner spent $5k without consulting them first, reveals research from coupon birds.
3 days ago

Sponsored Articles

Spicy Homemade Loaded Taters Tots...
Macey's

5 game day snacks for the whole family (with recipes!)

Try these game day snacks to make watching football at home with your family feel like a special occasion. 
Happy joyful smiling casual satisfied woman learning and communicates in sign language online using...
Sorenson

The best tools for Deaf and hard-of-hearing workplace success

Here are some of the best resources to make your workplace work better for Deaf and hard-of-hearing employees.
Team supporters celebrating at a tailgate party...
Macey's

8 Delicious Tailgate Foods That Require Zero Prep Work

In a hurry? These 8 tailgate foods take zero prep work, so you can fuel up and get back to what matters most: getting hyped for your favorite
christmas decorations candles in glass jars with fir on a old wooden table...
Western Nut Company

12 Mason Jar Gift Ideas for the 12 Days of Christmas [with recipes!]

There are so many clever mason jar gift ideas to give something thoughtful to your neighbors or friends. Read our 12 ideas to make your own!
wide shot of Bear Lake with a person on a stand up paddle board...

Pack your bags! Extended stays at Bear Lake await you

Work from here! Read our tips to prepare for your extended stay, whether at Bear Lake or somewhere else nearby.
young boy with hearing aid...
Sorenson

Accommodations for students who are deaf and hard of hearing

These different types of accommodations for students who are deaf and hard of hearing can help them succeed in school.
Rising interest rates put homes out of reach for 2 of 3 Utah families