It’s that time of year again, where I reminisce about the 2024 real estate market. It was an interesting year, and considering how high interest rates have been, the values of homes and condos in our local real estate market have held up pretty well again in 2024, but we are still seeing the lock-in effect limit the number of homes for sale, and high interest rates limit the number of home buyers.
According to the National Association of Realtors (NAR), we broke a lot of records last year, ones that aren’t good records to break:
- The percentage of first-time buyers was at a historic low, with a market share of just 24% from July 2023 to June 2024, down from 32% in the previous twelve months.
- The average age of a first time home buyer, at 38 years old, was at a historic high. Up from age 35 in the previous twelve months and age 30 in 2010.
- The average income of the first time buyer was also at a historic high, at $97,000 per year.
And first time buyers were not the only ones that set new records. All of the numbers below are record highs:
- The average age of a repeat home buyer was 61 years old, up from age 58 in the previous twelve months and age 41 in 2010.
- The average income of a repeat home buyer was $114,300.
- The average age of all home buyers was 56 years old, up from age 49 in the previous twelve months and age 39 in 2010.
- The average income of all home buyers was $108,800.
So we’re seeing some big changes, and Salt Lake has higher home prices than the average market, yet home values have held up. So let’s take a look at the fourth quarter results for homes in Salt Lake County, and see how high interest rates are affecting our local residential real estate market.
The median price of a single-family home in Salt Lake County increased by 3.3% to $599,000 in the 4th quarter of 2024, up from $580,000 in the 4th quarter of 2023. This is in line with the previous year when we saw an increase of 3.2%.
The five-year annual rate of appreciation for single family homes in Salt Lake County was 8.9%, up from $385,000 in the 4th quarter of 2019, to $599,000 today. The five year rate of appreciation was 10.8% last year at this time, so the curve continues to flatten.
If you compare the combined total of homes listed for sale in the two years of 2020 & 2021, to the combined total listed in 2023 & 2024, there was a 27% decrease, from 28,387 to 20,646 homes.
If you compare the combined total of homes sold in 2020 & 2021, to the combined total sold in 2023 & 2024, there was a 36% decrease, from 25,359 to 16,241 homes.
The median price of a condo/townhome in Salt Lake County increased by 5.7% to $430,000 in the 4th quarter of 2024, up from $407,000 in the 4th quarter of 2023.
The five-year annual rate of appreciation for a condo/townhome in Salt Lake County was at 8.8%, up from $280,000 in the 4th quarter of 2019, to $430,000 today. The five year rate of appreciation was at 8.9% last year at this time.
If you compare the combined total of condos/townhomes listed for sale in the two years of 2020 & 2021, to the combined total listed in 2023 & 2024, there was a 21% decrease, from 11,164 to 8,775 units.
If you compare the combined total of condos/townhomes sold in 2020 & 2021, to the combined total sold in 2023 & 2024, there was a 33% decrease, from 10,030 to 6,728 units.
Looking Ahead
If you look at the current inventory situation, there is about 8 weeks of inventory of single family homes in Salt Lake County and about 10 weeks of inventory of condos & townhomes, when you compare the number for sale to the number under contract.
Last year at this time there was about 8 weeks of inventory for both single family homes and for condos and townhomes.
Interest rates are slightly higher than they were a year ago and two years ago, with the average 30-year mortgage rate at 6.9% compared to 6.6% a year ago and 6.5% two years ago.
The Federal Reserve has started bringing down the Federal Funds rate, dropping it three times since September 18, 2024, with 0.5% drop on 9/18/24, a 0.25% drop on 11/7/24, and another 0.25% drop on 12/18/24, yet interest rates for the 30-year mortgage have actually increased during this time, from 6.1% on 9/19/24 to 6.9% on 1/2/25, per Freddie Mac.
Keep in mind that the Federal Funds rate is the overnight interest rate at which banks lend money to each other to maintain their financial reserves. This is a very short-term loan rate.
The interest rate for the 30-year mortgage is benchmarked off the US Government 10-year treasury note, a long term rate, which has increased from 3.63% on 9/16/24 to 4.55% on 12/30/24. That’s why mortgage rates have increased.
There are quite a few factors that effect the rate of the 10-year treasury note, like investor expectations for short and long term interest rates, monetary policy of the Federal Reserve, fiscal policies of federal government leadership, and expectations of inflation and economic growth.
It’s a complicated topic, so let’s leave it at that for now.
If you have any questions about buying or selling residential real estate in or around Salt Lake, wonder what your home is worth, or know someone who needs help buying or selling, I’d love to hear from you! Over 90% of the people I help are repeat customers and referrals from the people I know.
Thank you!
Kev
