Aspiring homeowners in Utah should prepare themselves to see more expensive prices for listed properties, while the cost of acquiring a mortgage would also be another challenge for their home purchase.
In Eagle Mountain, a property for sale could have increased, yet it may not be as expensive as the price of a new home in Salt Lake County or along the Wasatch Front.
As of the last quarter of 2018, the average price of a single-family home in Salt Lake County amounted to $350,000 from $325,000 year over year. Median prices for the same property along the Wasatch Front also increased to $334,000 from $300,000 during the same period.
Picking the Right Mortgage
Some analysts suggested buyers to consider a mortgage with an adjustable rate. You are essentially buying time since this allows you to pay a smaller figure every month in the first few years.
By the time you recover financially, you could then apply for a remortgage with a fixed-rate interest. Interest rates may increase as what many analysts expect the Federal Reserve to do so for 2019. A higher mortgage rate lowers consumer spending power, which would then affect home-buying activity.
Likewise, existing home sales may not be as strong due to the reluctance of sellers. Most people rarely put their properties on the market if they see a trend of price growth.
Not Really a Seller’s Market
An increase in median home prices often indicate a seller’s market, but this isn’t exactly applicable to Salt Lake County and Wasatch Front. While some people are willing to pay a premium to live in a popular zip code, many are forced to wait until the market goes through a price correction when values begin to drop.
For instance, home sales in five Wasatch Front counties fell in the last three months of 2018. Home sales in Utah County dropped by 11%, possibly because of the steep cost of homes in Alpine. The median price in the city reached $577,500 in the fourth quarter.
As a seller, you should rethink your strategy and find an experienced real estate management company to assist in the transaction. Unless wage and job growth occurs this year, not many buyers will be out there to place a bid.
Home Equity Growth
Higher home equity serves as one reason why homeowners aren’t too keen on selling their homes just yet. Home equity loans could be more popular this year because of the increase in median prices. Homeowners typically use the loan proceeds to pay for major improvements or repairs.
This is a common strategy before selling and downsizing into a new home. Some simply use it to unlock the value of their investment.
Higher mortgage rates, expensive prices and strong demand for entry-level homes will make it more challenging for first-time buyers to have their own house this year. The best you could do requires the help from a property management company, which may help you with finding the right property for your budget.
