2025 Mid-Year Housing Forecast: What's Next for the Utah Market?

As we cross the midpoint of 2025, Utah Digs presents a comprehensive look at the housing market forecast for the remainder of the year. High mortgage rates and home prices have characterized the market, causing many buyers and sellers to wonder what to expect next. ¹ This report provides data-driven insights to help you navigate the dynamic real estate landscape in Salt Lake City, Park City, and the surrounding Utah areas.

The Big Question: Will Home Prices Fall?

A primary concern for many prospective buyers is home affordability and the potential for price drops.  According to a mid-year analysis, a significant price crash is not anticipated. Nationally, home prices are not expected to fall in 2025; instead, they are projected to rise at a much more moderate pace. As housing inventory grows, there is less upward pressure on home prices, leading to a slowdown in the pace of growth. 

An average of eight leading industry forecasts shows a modest national price appreciation of 1.6% for the year. 

"While some more pessimistic forecasters are calling for slight declines, the majority expect positive price gains."

What This Means for Utah

The housing market is hyper-local, and conditions in Utah may vary from national averages. While some major metro areas have seen slight price cooling, these dips are often offset by significant long-term gains. For instance, in several markets, home prices have risen substantially over the past five years, meaning homeowners who have been in their homes for a few years are still well-positioned.  The key takeaway remains that homeownership is a powerful long-term investment.

Let's Talk Mortgage Rates

The direction of mortgage rates is a critical factor for many buyers and sellers. The expert consensus suggests that the 3-4% rates from a few years ago are unlikely to return soon. Instead, forecasts show rates will likely settle in the mid-6% range by the end of 2025. 

• Q3 2025 Average Forecast: 6.68% 

• Q4 2025 Average Forecast: 6.58% 

   

"If you're looking for a substantial interest rate drop in 2025, you'll likely be left waiting." 

A Broader Perspective on Home-Buying Decisions

While mortgage rates are important, they are not the only factor. For most people, life events are the ultimate driver for moving. 

Key non-financial reasons for moving often include:

• A growing family

• A new job 

• Retirement

• A shift in personal priorities 

A recent Realtor.com survey found that

79% of homeowners thinking about selling are doing so out of necessity—not because market conditions are ideal.  Therefore, prospective buyers and sellers should weigh their personal timelines and needs against waiting for potential market shifts. Explore homes for sale in Salt Lake City or check out luxury properties in Park City to see what fits your current needs.

Will More Homes Sell This Year?

Last year saw the lowest number of home sales in a decade. Despite recent inventory growth, expert projections suggest that the number of sales will remain relatively flat compared to 2024. Affordability remains the primary challenge holding the market back. 

Forecasts for existing home sales in 2025 are cautious:

• NAR: 4,311,000

• MBA: 4,210,000

• Fannie Mae: 4,143,000

• Zillow: 4,140,000

   

The silver lining is that added inventory will help moderate home prices. This, combined with the potential for slightly lower rates, may ultimately improve affordability for buyers.

Navigating the Market in the Second Half of 2025

The re-balancing of today's housing market requires new strategies and informed conversations.  To navigate the roadblocks buyers and sellers face, clients need a trusted advisor who can: 

• Anticipate objections and provide timely, relevant information. 

• Listen to their unique needs and concerns.

• Simply and effectively explain their options.

In this complex market, having an expert who can explain what is happening, why it's happening, and how it relates to your specific situation is invaluable. 

For professional guidance tailored to the Utah market, contact the team at Utah Digs today. Let us help you make your 2025 real estate goals a reality.