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NAR Chief Economist: Utah home sales could surge 20% in 2025
Rob Shelton | Lehi Free Press
Utah’s real estate market is poised for significant growth in 2025, with home sales potentially increasing by as much as 20% this year, according to National Association of Realtors Chief Economist Dr. Lawrence Yun.
Speaking at the Salt Lake Board of Realtors’ Economic Summit on Feb. 21, Yun delivered an optimistic outlook for Utah’s housing market despite nationwide challenges over the past two years.
“The conditions for more home sales are clearly developing,” Yun said. “Utah will outperform the national average because your job growth is much better.”
While the national forecast calls for a 9% increase in home sales in 2025 and 13% in 2026, Yun suggested Utah could see even stronger performance due to the state’s exceptional job creation and population growth. These increases are for increase in sales volume, not in sales prices.
Inventory improvements key to recovery
Yun identified three key factors driving the market’s positive trajectory: increasing housing inventory, continued job growth, and the prospect of moderating mortgage rates.
“Builders are back on their feet,” Yun said, noting that new construction has returned to pre-COVID levels. “Even at higher interest rates, somehow the builders are able to make sales.”
The economist explained that, while realtors have struggled with historically low inventory over the past two years, recent data shows inventory is beginning to increase. This growing supply is already translating to more sales activity, with four consecutive months of year-over-year increases in home sales nationally, despite higher mortgage rates.
Utah continues to rank among the nation’s economic leaders, with job growth exceeding 10% compared to pre-COVID levels. This strong employment picture underpins housing demand.
Mortgage rate outlook
Mortgage rates, which have remained stubbornly high despite Federal Reserve rate cuts, should moderate throughout 2025, according to Yun.
“I think we are at a cyclical peak in the mortgage rate,” he said, projecting rates could drop to 6.5% by spring and possibly reach 6% by year-end.
Yun cautioned, however, that due to high national debt, a return to the 4-5% mortgage rates seen in recent years is unlikely.
Advice for realtors and clients
Yun encouraged realtors to reconnect with past clients, noting that homeowners are in a “happy mood” due to substantial equity gains. Utah homeowners have seen approximately 59% price appreciation since before the pandemic.
For first-time buyers hesitating to enter the market, Yun emphasized the wealth-building potential of homeownership, pointing to Federal Reserve data showing the substantial wealth gap between homeowners and renters.
“You have to own part of America to build wealth,” Yun advised realtors to tell clients.
With improving inventory, job growth and the prospect of moderating mortgage rates, both Yun and University of Utah economist James Wood predict 2025 will be significantly better than the previous two years for Utah’s real estate market.
“The worst in your business activity is coming to an end,” Yun concluded.
