Sara Hiatt January 9, 2025
This week, I had the pleasure of joining 20 top performing women in the Real Estate industry for an exclusive economic forecast meeting with Josh Romney, the owner of Intercap Lending & The Romney Group. We took a close look at the Utah housing market and discussed what we can expect for 2025.
When I think about the questions my clients need answers to, it all boils down to two things:
What will happen with home prices?
What will happen with interest rates?
Starting with interest rates, economists predict future rates by examining past trends combined with current economic data. Historically, we might expect rates to drop right now given the current affordability metrics, but the economy is heavily influenced by high inflation and low unemployment. Our current unemployment levels are still low and inflation is high. Because of this, the Federal Reserve is being cautious with rate cuts.
Experts forecast only 1 to 2 small drops in rates for 2025, and since those cuts have already been factored into the ten year spread, they won’t have a significant impact on rate reductions. Romney’s best estimation is that we could end up with rates hovering around 6% by the year's end.
One of the standout lines Romney used during this economic forecast is that lowered interest rates don’t make housing more affordable; they only make existing homeowners wealthier. Since the housing demand in Utah is still high, lowering rates could likely just trigger higher home values.
So let’s dive into home prices in Utah. There is currently more demand for housing than there is available inventory. While it may seem like homes are taking longer to sell than in recent years, we haven't reached a balanced market yet, and new construction is significantly down. Utah continues to see one of the highest population growth rates in the country, and it ranks as the 6th healthiest economic state according to CNBC. Given this strong demand and stable economy, home prices are unlikely to decrease.
In summary, here are my key takeaways from the meeting:
PS - We also discussed other important topics like new construction, high-density housing, the bond market, the impact of AI on real estate, property insurance, and potential property tax increases. I’d love to share more insights, so let’s connect over lunch or coffee!
Exclusive economic forecast meeting with Josh Romney, the owner of Intercap Lending & The Romney Group. We took a close look at the Utah housing market and discussed w… Read more
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We mostly attribute the decrease in the amount of home sales to rising interest rates.
Whether you're looking to buy as a first time home buyer, looking to sell your home, or start investing in real estate, we'd love to help you on your journey. Don't hesitate to reach out with any questions!
