Boy, my magic 8 ball has been working overtime for the last couple of years. Rising home values quickly become explosive when you have a pandemic & low inventory! Now, instead of COVID, our pandemic seems to be high interest rates, & low inventory. So, what’s next?
Well, the national experts seem to be in the same ballpark on what to expect this year. Let’s start with interest rates. First of all, it’s not JUST the “high” rates that are making things tough. For most of the first 15 years of my career, rates were actually higher than they are now, sometimes nearly double. It’s a combination of the rate, high home prices and the fact that wages haven’t kept up that make things tough on the buying side. It’s not the actual rate that scares people, it’s the monthly payment. Add in the fact that there isn’t enough inventory and you actually have a perfect storm of tough when it comes to buying. On the selling side, those higher rates mean that sellers aren’t anxious to give up their 3% rate to move to a 6.5%, which I also understand. Most of the national “guessers” are suggesting that rates will stay between 6.5 and 6.8% with rates starting to drop a bit toward the end of the year. I’m a bit more optimistic than that. I’m thinking we’ll be close to 6% at some point. More important to me than the rate itself is needing to reach some stability. The market doesn’t respond well to crazy.
How about inventory? Most of the prognosticators are suggesting a big increase in housing starts, which will help, but there is no silver bullet here. It took us a decade and a half to get this far in the hole and it’ll take an effort to get moving in a positive direction. It’ll take government, developers and lenders all working together to create a market that starts to deal with all the issues involved here. Here in Utah, we have a Governor and a Legislature that are showing that they understand their role in fixing this “epidemic”. Now, if we can get municipalities and developers to work together too…We also have a NIMBY issue to deal with, but that’s for another day.
So, what will ’25 mean in Tooele County? Most sources show us as one of the fastest growing areas in the nation. Why? Because this is an amazing place to live and people are figuring that out! Want to talk more specifically about home ownership and how we get you there? Want to see some of the tools we’ll use to get you into a home without that huge interest rate? Call us anytime at 435-840-5029 and I’ll shake up that 8 ball for you!