HOUSING + HOMELESSNESS

Mortgage rates back below 7%, how does it affect Utah buyers?

Dec 15, 2023, 3:00 PM

new housing being built -- mortgage rates in utah are looking better...

Town homes and apartment construction in the Herriman area on Tuesday, Nov. 14, 2023. (Scott G Winterton/Deseret News)

(Scott G Winterton/Deseret News)

SALT LAKE CITY — Mortgage rates are finally back below 7% for the first time since August. The news comes as the Federal Reserve kept interest rates steady on Wednesday. Many experts believe they could begin cutting rates in 2024.

Senior Research Fellow at the Kem C. Gardner Policy Institute Dejan Eskic told KSL NewsRadio that overall, this is good news for the local market.

Eskic said it would save people roughly $300 a month in payments compared to just a couple weeks ago.

“That’s a big difference-maker for people,” Eskic said. “Being able to afford a little bit more and a $300 savings per month…it’s huge.”

Utah has suffered from a large housing shortage for quite some time. Add that to tens of thousands of people moving to the state every year and demand for homes in the Beehive State has only grown. So has the price to buy them.

Eskic said as of Friday, the median price to buy a home in Utah was roughly $500,000.

And while the lower mortgage rates are good for some buyers in the short-term, Eskic believes they will in turn drive home prices up over time.

As demand goes up, so do prices.

What’s the solution?

Utah leaders, including Gov. Spencer Cox, have been hard at work trying to build more homes in the state. Lawmakers also created a loan program to help get first-time buyers in the door.

Eskic said the state does need to build more homes in general, but he believes we need to focus on building various types of housing.

“We have this culture of big families… if we want to keep that, we have to house our kids,” Eskic said. “I don’t know how you achieve that with having quarter-acre lots.”

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Mortgage rates back below 7%, how does it affect Utah buyers?