Keeping an eye on foreclosure trends in Utah

What’s going on with rates and how does the Beehive State compare to the rest of the country?

It may feel like you’ll be hearing about the housing market ‘til the cows come home. But if you’re looking for a place to call your own, it’s wise to pay attention to market changes (even subtle ones). If you’ve been watching national trends, you’ve probably noticed some of those shifts, including the fact that foreclosure rates are creeping up. KSL Homes looks at how Utah’s foreclosure rates compare to the rest of the nation. 

Why we look at foreclosure rates

Foreclosures happen when someone takes out a mortgage loan and, for any number of reasons, can’t make those payments anymore. The lender then takes ownership of the property if payments are not made. Looking at foreclosure rates gives a glimpse into the market by telling us how many people are going through this process both regionally and nationally. This data will be gathered when evaluating any ups and downs in the economy.

Your home buying budget may be affected as foreclosure rates change.

Current status of foreclosures

Utah’s current foreclosure rates are significantly lower compared to 2010 when Utah was fifth in the nation for foreclosures. In February, 2023 Utah had a 1.4% foreclosure rate, 175 homes going into foreclosure in March and 1,045 foreclosures total by June, 2023. 

The third quarter of 2023 showed national foreclosure levels went up 8%, but still stayed below pre-pandemic levels. At the same time, Salt Lake City saw 74% decreases. And in February of this year, Utah ranked twentieth in the nation for foreclosure rates. 

Homeowners and homebuyers reaped the benefits of low interest rates and a foreclosure moratorium during the pandemic.

These increases have been partially attributed to the federal moratorium on foreclosures that was put in place during the pandemic coming to an end in July, 2021. And at that point interest rates were hovering close to 3%, impacting people’s choice to move into more expensive homes with higher interest rates that we see now. 

As of March 2024, Utah has 768 properties in foreclosure, more than double from this time last year. While we’re waiting for more data reports to come in, the numbers so far give us a glimpse into what the year may bring. But overall, Utah’s foreclosure rates are lower than 15-20 years ago, lower than before the pandemic and currently sit close to the middle nationwide.

How foreclosure rates could affect you

When talking to your real estate agent, you may have some questions about how and if the market will change during your home buying process. If foreclosure rates increase, could that change how much you need for a down payment? Possibly. 

If foreclosures go up in Utah, it could affect home prices. Utah is said to have a housing shortage and more homes on the market could lower the value of your home. It’s also important to consider that foreclosure rates going up alongside layoffs could affect affordability in other ways besides home price. 

Ask your real estate agent how foreclosure rates will affect your home buying process.

This would affect people in several different ways. There could potentially be more options on the market for homebuyers. For sellers, home values could decrease or sales could be delayed when trying to sell. Homeowners hoping to avoid foreclosure may decide to rent out their homes, adding to the rental pool and possibly affecting rent prices.

Keeping an eye on foreclosure trends can help you navigate the process of looking for home sweet home. If you’re ready to make an offer, check out listings on KSL Homes.