Utah median home price sets new record in January

February 24, 2022

As home buyers rushed to secure properties and avoid interest rate hikes, Utah’s median home price hit a new record in January, according to the Utah Association of Realtors.

The $486,000 statewide median is the highest recorded having jumped 28% in a year. That equates to an increase of $107,000 compared to the median of $379,000 in January 2021. This marks the 118^th consecutive month of year-over-year increases.

Nationally, prices also rose but at a slower pace. The U.S. median existing-home price went up 15% to $350,300.

“Buyers were likely anticipating further rate increases and locking in at the low rates, and investors added to overall demand with all-cash offers,” said Lawrence Yun, chief economist of the National Association of Realtors, in a press release. “Consequently, housing prices continue to move solidly higher.”

Closed sales in Utah fell as buyers struggled to find properties. Utah Realtors sold 3,051 properties in January, down about 7% from the pandemic surge a year ago. Nevertheless, it was still very strong sales activity and is the fourth-best January on record.

There likely would have been even more sales except for the extremely low housing inventory. The number of properties for sale at the end of January fell to a record low of 2,742. That’s down about 28% from last year’s 3,789 active listings — also a record low at that time.

In a normal market where negotiating power is balanced between buyers and sellers, there would be 15,000-20,000 properties for sale and about six months of supply. This year, there was only 0.6 months of supply, which is also a record low.

That means housing market conditions remain difficult for buyers who face lots of competition for available properties.

“The inventory of homes on the market remains woefully depleted, and in fact is currently at an all-time low,” said Yun, who also mentioned that homes priced at $500,000 and below are disappearing.

“Clearly, more supply is needed at the lower-end of the market in order to achieve more equitable distribution of housing wealth,” Yun said.

In Utah, the number of homes for sale with price points below $500,000 was down 44% compared to last year. The inventory of homes priced above $500,000 had a smaller 11% decline. The $750,000-and-above category had the most listings available.

Yun expressed concern that the rising home prices along with rising interest rates might push some buyers out the market, especially in high-cost areas.

“First, some moderate-income buyers who barely qualified for a mortgage when interest rates were lower will now be unable to afford a mortgage,” Yun said. “Second, consumers in expensive markets, such as California and the New York City metro area, will feel the sting of nearly an additional $500 to $1,000 in monthly payments due to rising rates.”

In Utah, affordability has fallen 23% in the past year. As of January, a Utah family making the median income could not afford the median-priced home, having only 94% of what would be necessary for a purchase.

The counties with the most expensive home prices were Summit, Wasatch and Morgan with median sales prices of $1,325,000, $885,393 and $825,000 respectively.

The most affordable counties were Carbon, Millard and Duchesne with median sales prices of $184,000, $190,000 and $194,500 respectively.

The counties with the most competitive housing markets were Davis (0.3 months of supply), Salt Lake (0.4 months of supply), Utah (0.5 months of supply), Weber (0.5 months of supply) and Tooele (0.6 months of supply).

To learn more about market conditions in your area, contact a local Realtor.