Hey folks, thanks for tuning in to this month’s Inside Track. I wanted to bring you up to date on a few things that affect us.
First up, just a few days ago, the realtors released their 2026 housing forecast. If you’re watching this, odds are you own a home, maybe more than one, and I wanted to give you a general lay of the land.
There are some interesting takeaways, so let’s jump in. First and foremost, there have been very few changes over the last couple of years. One of the striking things is that we really have not seen much movement. Things have been very steady. The key idea here is that housing prices are sticky.
During the COVID years of 2020 to 2022, we saw a 40 percent increase in prices, which everyone knows was extreme. It was actually the strongest price surge in Utah’s real estate history going back 150 years. This unprecedented increase, combined with the pandemic’s impact on demand and the doubling of mortgage interest rates in 2022, led many people to believe the market would crash in 2023.
That did not happen. Prices fell slightly, about 2.8 percent. The only thing that truly drives housing prices down in a meaningful way is a prolonged recession with significant job losses and foreclosures. We are not likely to see that anytime soon.
Looking at the data, prices are expected to continue rising steadily. The sharp run-up during the pandemic years is clear, followed by a small dip in 2023 and then a period of prices leveling out. When compared to normal price appreciation, these trends are expected to converge around 2027. The takeaway is continued price stability.
What this means for homeowners is that we should not see the huge increases in property taxes we have experienced recently. Many of us have seen that reflected in our escrow reviews. The good news is that those increases should be behind us, and we should return to more normal appreciation of about 2 to 3 percent, possibly as much as 4 percent.
Homeownership among younger buyers continues to drop, which is not surprising given affordability challenges.
Wrapping things up for 2026, there are both headwinds and tailwinds in the market, and they largely balance each other out. The economy remains fairly strong, though it is slowing. Net in-migration is also slowing, and interest rates are trending downward. Overall, this points to stability.
So what does this mean for you? Prices are likely to inch up gradually, but nothing like the rapid increases we saw in the past.
If you have a mortgage rate around six and a half percent or higher, it may be time for us to talk. Rates are coming down, and we are starting to see rates in the five percent range. If that applies to you, email me your most recent mortgage statement and we can review your options.
That’s about it for me. As always, thank you for watching. As one of Salt Lake City’s top mortgage brokers, I truly appreciate the opportunity to help you, your family, friends, and co-workers. If you have any questions, please reach out. I am never too busy to help. Thanks again, and we’ll talk to you soon. Take care.
