Mortgage rates gave back last week's improvement, but the housing market shrugged it off. Freddie Mac's 30-year fixed averaged 6.52% for the week ending June 11, up from 6.48%, with the 15-year at 5.84%. The more important story is that buyers are moving anyway. Freddie Mac's chief economist said homebuyers are looking past short-term rate swings and entering the market, and the sales data this week backs that up.
National Snapshot
The National Association of Realtors reported that existing-home sales rose 3.2% in May to a 4.17 million annual pace, the highest since December and up 3.2% from a year ago. The median price reached a record $429,300, though that is only 1.3% above last May. Inventory climbed to 1.55 million homes, a 4.5-month supply, and homes sold in a median of 29 days. The stat that caught our eye: first-time buyers made up 35% of purchases, the highest share since June 2020. Those are exactly the buyers who benefit most when incomes rise faster than prices.
Inflation Is the Problem
Wednesday's consumer price index was a tough read. Prices rose 0.5% in May, putting annual inflation at 4.2%, the fastest since April 2023. Energy was the culprit, up 3.9% for the month and 23.5% over the past year because of the Iran war's effect on fuel. Core inflation, which strips out food and energy, was tamer at 2.9% and rose only 0.2% for the month. Markets read the report as keeping the Federal Reserve on hold at this week's June 16-17 meeting, but futures now price about a 60% chance of at least one rate hike by the end of the year.
That meeting is Chair Kevin Warsh's first at the helm. We will be watching the statement and the updated projections closely, because a Fed that leans toward hiking would keep mortgage rates in the mid-6s through the summer.
What's Moving Markets
Over the weekend, mediators announced that the United States and Iran reached a memorandum of understanding laying out a 14-point framework to end the fighting and a 60-day negotiating window for a final agreement. If it holds and the Strait of Hormuz fully reopens, oil should keep falling, and that is the single best thing that could happen to next month's inflation numbers and, by extension, mortgage rates. It is an if, but it is a meaningful one.
What This Means for Central Utah
The Utah Association of Realtors' May report, current as of June 10, shows the statewide median sales price rose 3.5% to $528,000 and the average price rose 2.3% to $675,265. Activity was softer: closed sales fell 8.1% from last May, pending sales fell 11.2%, and new listings dropped 6.0%. Homes sold in a median of 56 days, a day faster than a year ago, and the state has 4.5 months of supply. Fewer listings and steady prices mean Utah remains close to balanced, tilting slightly toward sellers in the best-priced segments.
For Central Utah real estate, the contrast with the Wasatch Front is the opportunity. A $528,000 statewide median is out of reach for many families, but Sevier County homes and properties in Sanpete, Juab, Wayne, and Piute counties often list for far less, and USDA zero-down loans remain available in most of our towns. With first-time buyers driving the national rebound, this is a good season to be a first-time buyer in Richfield, Salina, Manti, or Nephi.
Sellers, take note of the statewide drop in new listings. Less competition on the market is good news if your home is priced correctly. Our team is happy to show you what has sold in your area over the past 60 days and help you set a number that draws buyers in rather than scaring them off.