High Utah home prices and interest rates expected to remain in 2025

SALT LAKE CITY (KUTV) — High home prices and interest rates in Utah’s real estate market are expected to remain in 2025, leaving potential homebuyers with difficult decisions ahead.

Many first-time homebuyers face interest rates above 6 percent. The median price of a single-family house in Utah in now $564,000. In Salt Lake County, the median single-family house price is $610,000.

Despite those challenges, local real estate professionals advise against waiting for market conditions to improve in order to pursue homeownership.

Claire Larson, president of the Salt Lake Board of Realtors, said that waiting for prices and interest rates to drop may not be a viable strategy.

“The longer you wait, the harder it is to get into a home because prices are going to continue to go up,” Larson said.

She said figure out your finances and ask your loan officer and agent about options to buy down the interest on your loan so you can achieve an affordable monthly payment.

James Wood, a senior researcher with Kem C. Gardner Policy Institute, said in Salt Lake County prices are expected to increase by 2 percent for single-family homes and 6 percent for condos in 2025.

Mortgage interest rates aren’t expected to move much.

“I think they are going to be stuck between 6 and 7 percent and that’s very likely for 2026,” Wood said.

He, like Larson, encouraged potential first-time buyers to not wait for better prices and buy now if they can make it happen financially.

He suggested leaning on parents or grandparents for financial help and looking into state programs designed to help first-time buyers.

He said first-time buyers should be realistic about the the type of home they can afford.

“I would recommend get in now, but it’s not going to be your first choice,” referring to the fact that many first-time buyers will have to put off dreams of a stand-alone house, and buy a townhome or condo instead.

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For the first time in Utah, according to Wood, the sales price of existing houses is higher than that of newly-built houses.

As affordability remains an issue, builders are constructing what buyers can afford: mostly townhomes and condos. Many builders are also offering more incentives and financial assistance to buyers.

“Condos, twin homes and townhomes are now about one third of all new homes built,” Wood said.

Finding a home in the $300,000 range is nearly impossible — that price range accounts for only 2% of sales in Utah, according to Wood.

But somehow, Alyssa Steinhouse found her first place for under $350,000.

“I thought I was going to have to go a lot farther from the center of the city to find something I could afford,” she said of her purchase.

Steinhouse recently purchased a two-bedroom townhome, a short drive to work and to the center of her social life, both in downtown Salt Lake.

“I’m so glad I bought now,” she said.

Steinhouse said the interest rate on her loan is less than ideal, but she had a bigger vision.

“It’s scary, but looking at the long-term benefits of getting in sooner rather than later is what made the difference for me,” she said.

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