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SANDY — Higher mortgage rates are not only making homes less affordable for buyers, they’re also resulting in fewer homes on the market.
“New listings are at a record low for this time of year as existing homeowners hold onto their low mortgage rates and delay selling and subsequently buying,” according to the Utah Association of Realtors.
The association’s June report shows that new listings are down nearly 30% compared to one year ago. Closed transactions also fell by more than 21% during the same time frame.
“The U.S. housing market remains cooler than usual for this time of year due to a combination of low inventory and higher borrowing costs, which have restricted market activity going into the summer homebuying season,” the report said.
The average rate for a 30-year mortgage was 6.81% as of July 27, according to Freddie Mac’s Primary Mortgage Market Survey. A year ago, the rate for a 30-year home loan averaged 5.3%.
“It’s slipping away from a seller’s market into a buyer’s market as long as rates stay where they’re at,” said Adam Kirkham, president-elect of the Utah Association of Realtors and managing broker at Summit Sotheby’s.
Kirkham described the Utah housing market as “delicate” with sellers still wanting top dollar, while buyers want affordability.
“They’re seeking more concessions,” he said of buyers. “They’re seeking price reductions. They’re really looking for a bargaining chip to help lower that price.”
The median sales price in Utah fell 6% to $495,000. Utah home prices reached their peak of nearly $540,000 in May 2022.
With existing homeowners reluctant to sell and trade for a higher mortgage rate, Kirkham said new construction is filling the void.
“If they can build a home and they can offer some incentives to get your rate down, there’s a need for that inventory,” he said. “So they’re really fulfilling a lot of need for us right now for housing to get people into new homes.”
It’s now taking an average of 46 days from a time a home is listed for an offer to be accepted, the report said. That’s up from an average of 21 days last June and an average of 18 days in June of 2021.
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