SALT LAKE CITY (KUTV) — Utah residents looking to buy a home may be in for some good news after Federal Reserve Chairman Jerome Powell hinted that interest rates could soon drop.
This has sparked optimism among potential homebuyers and local economists alike.
In Salt Lake City, where real estate prices are significantly higher than other areas in the Valley, lowering interest rates could lead to better affordability.
Brian Leveille, a resident of Salt Lake City, was considering buying his first home.
“I definitely want to own a home in the near future,” Leveille said. “I’ve talked to a few agents but haven’t gone full-on house hunting, but as interest rates start to drop, I think I’ll get more involved and bring someone on board to help me find the perfect home.”
The potential for lower interest rates comes from the Federal Reserve’s annual Jackson Hole meeting, where Powell indicated that interest rate cuts are likely to begin in September.
This news was closely followed by economists and financial experts.
“We’re already seeing that impact,” said Robert Spendlove, senior economist at Zions Bank. “If you look at longer-term rates, like the 10-year bonds or the 30-year mortgages, which are a little more variable, they’re already starting to come down.”
Spendlove said interest rates on credit cards and auto loans would gradually decline.
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The potential interest rate cuts could provide much-needed relief for many homebuyers who have been unable to afford a home due to rising mortgage rates in recent years.
Spendlove noted that these changes could make home ownership more affordable for many Utah residents.
“The groups that are feeling the biggest impact are first-time home buyers, lower-income buyers, people just leaving college or starting a family. They’ve had a really hard time getting into the housing market, so hopefully this will give them a little more security,” Spendlove said.
As Leveille continues to evaluate his housing options, including considering a condo in downtown Salt Lake City, he plans to keep a close eye on interest rate changes.
“I know it’s pretty expensive in downtown Salt Lake or near Salt Lake City, so I’m more likely to look for a condo,” Leveille said. “I’ll definitely take a closer look.”
While the exact timing and extent of the interest rate cuts are still uncertain, the US Federal Reserve’s forecast assumes that interest rates will be cut gradually starting in September.
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