2025 Utah Real Estate Outlook

Many are hoping that the ball won’t be the only thing dropping on New Year’s Eve, but that inflation (especially mortgage interest rates) will also be falling in 2025. 

Our team predicts that interest rates will be a decisive factor that determine the state of the Utah Housing Market this year. After much discussion and research, here’s the likelihood of rates dropping, and what will happen if they do (or don’t).

The Federal Reserve doesn’t set interest rates, but it does influence them. Looking at the recent and upcoming actions of the Fed helps us understand the state of the economy and what may happen to rates in the future. 

On December 18th, 2024, the Federal Reserve announced another 0.25% rate cut as well as indicated that they are going to cut rates slowly and cautiously, with only two predicted rate cuts in 2025 as opposed to their previous hope of four cuts in the new year. 

“We see the risks as two sides,” said Fed Chairman Jerome Powell. “ Move too slowly and needlessly undermine economic activity in the labor market, or move too quickly and needlessly undermine our progress on inflation.” 

With uncertainty about Trump’s policies and the Fed moving slowly, mortgage interest rates may be stuck in the general area they’ve been in the past 45-60 days (mid to high 6’s) for the first few quarters. A large drop in rates is not predicted unless something drastic happens to rock the economy, but there is a gradual predicted rate decline throughout the year. 

Overall, the market is slowly starting to pick up. The summer months of higher inventory and high demand are just around the corner. The new year has already brought new listings and real estate activity as the holidays wrap up. 

When interest rates do fall, there will be many more people entering the market due to pent up demand. Our team tends to get more calls when mortgage rates dip even slightly. 

Home prices are slowly increasing, even with high interest rates. There likely won’t be a large spike in home prices until interest rates drop, which would lead to higher demand and prices. 

If interested in buying or selling, start by giving us a call! We will help you find the best property and payment available now, and explain what potential refinancing options would look like in the future. 

2025 is going to be an exciting year in real estate! There are exciting opportunities and properties coming on the market every day! Send us a message if you want to see some of these properties. 

SOURCES: 

https://realestate.usnews.com/real-estate/housing-market-index/articles/the-hottest-housing-markets-in-the-us

https://www.cnbc.com/2024/12/18/fed-rate-decision-december-2024-.html

https://apnews.com/article/federal-reserve-interest-rates-loans-consumers-borrowing-f2cc94978bb7909de9fe49a3280473dd