If you’re thinking about buying a home around the Salt Lake valley, you want to know the decision will be a good one. And for many, that means thinking about what Utah home prices are projected to do in the coming years and how that could impact your investment.
This year, we aren’t seeing home prices fall dramatically. As the year goes on, however, some markets may go up in value while others may lose value. That’s why it’s helpful to keep the long-term view in mind. In fact, Utah’s housing market has experienced an average of 5.5% price appreciation every year since the 2008 housing crisis.
Home Price Appreciation in the Years Ahead
Over 100 economists, investment strategists, and housing market analysts were polled by Pulsenomics in their latest quarterly Home Price Expectation Survey (HPES). The report indicates what they believe will happen with national home prices over the next five years. As the graph below shows, after mild depreciation this year, these experts forecast home prices will return to more normal levels of appreciation through 2027.
The big takeaway is experts aren’t forecasting a drastic fall in home prices nationally, even though some markets, such as the Salt Lake City metro area, will see home price appreciation while others may depreciate. And when they look further out, they see steady price appreciation in the long run. That’s a great example of why homeownership wins over time.
What Does This Mean for You?
Once you buy a home, price appreciation raises your home’s value, and that grows your household wealth. Here’s how a typical home’s value could change over the next few years using the expert price appreciation projections from the survey mentioned above (see graph below):
In this example, if you bought a $400,000 home at the beginning of this year and factor in the forecast from the HPES, you could accumulate over $54,000 in household wealth over the next five years. So, if you’re wondering if buying a home is a sound decision, keep in mind what a strong wealth-building tool it is long term. Additionally, keep in mind that these are national figures and not representative of what is actually happening in Utah. The housing market along the Wasatch Front remains strong due to extremely low inventory. We currently have 30% less inventory in Salt Lake County than at this same time last year. That is keeping housing values higher due to more Buyers and less homes for sale.
BOTTOM LINE
According to the experts, some areas of the country may see slight depreciation this year. Yet, home prices are expected to grow over the next five years. Salt Lake City’s housing market still has the ability to appreciate this year due to low inventory and high buyer demand. If you’re ready to become a homeowner, know that buying a home in Utah today can set you up for long-term success as home values (and your own net worth) are projected to grow. Let’s connect to begin the home buying process today.
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