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Now that the housing market is finally calming down after the pandemic[1], buyers are facing a new challenge: Soaring mortgage rates.[2]
In Utah, the average 30-year fixed mortgage rate is 5.59% — up from 2021's historic lows. This raises the average monthly mortgage payment to $2,581 (assuming a 20% down payment at the median home value).
But buying a home in Utah is still possible, even for first-time home buyers. Many markets are seeing frequent price drops and fewer offers, giving motivated buyers the upper hand in negotiating for the best price.
In this guide, you’ll learn how to buy a house in Utah with confidence no matter what the market brings. Learn why you can trust our advice.
Whether you're actively house hunting or just starting to browse homes on Zillow, it's never too early to find a great local realtor to guide you on your search. An experienced agent can help you navigate a tricky housing market, explore your financial options, and negotiate the best deal possible.
Best of all, hiring a real estate agent comes at no extra cost to you — since the seller typically pays both their listing agent and your buyer's agent.
Ready to find a great local realtor, but not sure where to start? The best (and easiest!) option is to try a free agent matching service like Clever Real Estate. Answer a few simple questions about your home buying goals, and Clever will match you with hand-picked agents from Keller Williams, RE/MAX, and other top brokerages in your area. Find a top local agent and make your home buying dreams a reality today!
Step 1: Save for a down payment
🔑 Key takeaway:
Your down payment can be less than 20% of the purchase price — $112,539 for the typical home in Utah — but you'll have to purchase mortgage insurance and pay more interest over the life of your loan.
Your down payment is the first part of your home's purchase price that you pay at closing. Your mortgage lender will pay the remaining balance.
Typically, mortgage lenders in Utah want you to contribute 20% of the purchase price as a down payment. That would be $112,539 for a $562,693 home — the typical home value in Utah.
However, you have options to lower your down payment amount.
Government backed loans, like VA and FHA loans, allow you to contribute 0% and 3.5% of your home's purchase price respectively. Even conventional loans allow for down payments as low as 3-5% (though the minimum varies by lender).
Mortgage type | Minimum down payment (%) | Down payment ($) |
|---|---|---|
VA Loan | 0% | $0 |
FHA Loan | 3.5% | $19,694 |
Conventional | 3% | $16,881 |
Based on typical home values from Zillow (August 2022) | ||
But making a down payment of less than 20% comes with some risks.
First, because you're borrowing more money, you'll have a higher monthly payment and pay more in interest over the life of your loan.
Down payment | Monthly payment | Total interest | Total Cost |
|---|---|---|---|
5% | $3,065 | $568,992 | $1,131,685 |
20% | $2,581 | $479,151 | $1,041,844 |
Based on home values from Zillow (August 2022) and a 5.59% interest rate for a 30-year loan. | |||
Second, you may have to purchase mortgage insurance.
Conventional loans require private mortgage insurance (PMI) until your loan balance reaches 80% of the purchase price. FHA loans, on the other hand, require a mortgage insurance premium (MIP) for the life of your loans.
Mortgage insurance costs around 1% of your mortgage balance annually. However, rates vary based on your down payment and credit score. Typically, your mortgage insurance payment is added to your mortgage payment each month.
VA loans don't charge mortgage insurance. Instead, you'll pay a VA loan funding fee at closing, which can range from 1.4% to 3.6% of the purchase price.
» READ MORE: Everything you need to know about low-income home loans
Utah down payment assistance programs
Down payment assistance (DPA) programs exist to help first-time and low-income homebuyers afford housing. In Utah, there are numerous DPA programs that provide eligible participants with a grant or second mortgage to cover closing costs or a down payment.
Here are just a few options you may qualify for:
UHC DPA Program
The Utah Housing Corporation offers down payment assistance to borrowers who qualify for a Utah Housing Corporation first mortgage. Financial aid is given as a 30-year second mortgage of up to 6% of your first mortgage. The second mortgage will have a 2% higher interest rate than the first mortgage.
Household income and home purchase price limits apply and vary by county.
CDCU DPA Program
The Community Development Corporation of Utah offers down payment assistance to first-time homebuyers in Salt Lake City, Salt Lake County, and Taylorsville. The maximum amount of assistance depends on the location of the purchased property.
To qualify for this program, participants must not earn more than 80% of the area median income. Borrowers are also required to contribute at least $1,000 towards the home purchase and complete a homebuyer education course.
U.S. Department of Housing and Urban Development
You can find alternative DPA programs in Utah on the state's HUD page.
Step 2: Find a great real estate agent in Utah
🔑 Key takeaway:
Interview multiple agents to find one who knows your target neighborhoods, has experience in your price range, and communicates well.
Your real estate agent will be your main ally during the home buying process. Besides finding and showing you properties, your agent will help you make offers, negotiate contracts, and navigate the closing process. Plus, they can recommend other service providers like title companies and inspectors to help you buy your home in Utah.
Don't rush into choosing an agent. Instead, take the time to research and interview multiple real estate agents who have experience in the neighborhoods you're interested in. You should pay attention to a realtor's:
- Years of experience
- Number of transactions in the last year (the more the better!)
- Experience in your price range
- Overall review score
- Individual reviews and complaints
Step 3: Get preapproved for a mortgage
🔑 Key takeaway:
Once you're preapproved for a mortgage, it's imperative that your financial situation doesn't change. If your credit drops, it can derail the process and keep you from closing on your house.
Here are some easy ways to ensure your credit doesn't change after you receive your preapproval letter:
- Avoid opening new credit accounts
- Don't close any accounts that have been open for a long time
- Make all of your credit card payments on time
» LEARN MORE: What factors do mortgage lenders consider?
A mortgage preapproval letter is an offer to lend you up to a certain amount of money to purchase a home. It shows sellers that you are a serious buyer who is financially qualified to make an offer on a home.
Most sellers in Utah will require preapproval before showing you their home.
You don't have to decide on one lender right now. In fact, you should compare interest rates and preapproval amounts from several lenders to make sure you're getting the absolute best terms when you buy your Utah home.
Step 4: Choose the right location
🔑 Key takeaway:
Search for neighborhoods where:
- Home prices are within your price range
- Home values are on the rise
- The local amenities support your lifestyle
Currently, the typical home value in Utah is $562,693, but don't worry if that doesn't perfectly match your budget. Home prices vary dramatically from city to city and even from neighborhood to neighborhood!
Also, look at past home value trends. This will give you an idea of how much your home's value could go up over the next few years.
To give you an idea of how appreciation could impact what your house is worth in the future, consider these examples from three neighborhoods in Salt Lake City:
Home value appreciation in Salt Lake City
Neighborhood | 2015 | Current | Appreciation |
|---|---|---|---|
Sugar House | $321,728 | $682,269 | 52.8% |
East Central | $311,001 | $664,595 | 53.2% |
Greater Avenues | $437,543 | $827,199 | 47.1% |
Step 5: Start house hunting in Utah
🔑 Key takeaway:
With the surge in inventory and the meager bump in listing prices in the last year, it’s a great time to hunt for a house in Utah. You will have a lot of options to choose from, many of which should be attainable with a reasonable budget. Your realtor can make things easy for you by filtering out listings and finding the ones that fit all your needs — they might even find a great deal for you.
Searching for homes in Utah is the fun part of the home buying process! You'll get to look at a variety of homes and discover what you really want in a home.
Make a list of everything you want in a home and prioritize them. At the top of the list should be the items that are most important to you. This will help you separate your "must-haves" from your "nice-to-haves."
Your agent can help you understand if your wants are realistic for your budget and favorite neighborhoods or if you need to rethink what you're looking for.
Look at current housing inventory
The timing of your house hunt in Utah can have a big impact on your number of options. For example, in Utah, May has historically seen the most homes for sale. Searching in this season could give you more options and a greater likelihood of finding your dream home.
On the other hand, December gives you the fewest choices in Utah. Historically, there are 50.7% fewer homes for sale than during Utah's peak season.
Housing inventory in Utah by season
Season | New listings per month |
|---|---|
Spring | 5,949 |
Summer | 5,949 |
Fall | 5,949 |
Winter | 5,949 |
Step 6: Make an offer
🔑 Key takeaway:
There is an increase in buyer demand in Utah, especially given the prices. With houses flying off the market, expect to face fierce competition if you find a great listing. You may even have to put in an offer as early as the same day of viewing just to get your name in the hat. For the best results, work with your agent when writing an offer — they can ensure that you put in something competitive while still keeping it fair for you.
Once you find a Utah house you love, it's time to make an offer. Your real estate agent will help you write a compelling offer that gives you the best shot of convincing the homeowner to sell to you.
Currently, in Utah, homes stay on the market for 54 days before going under contract. However, every market goes through seasonal changes. During busier months, homes get snatched up more quickly than others.
Historically, Utah homes sell fastest in June, where the average property is only on the market for 44 days. If your home search falls around this time, you should be prepared to move quickly and potentially make offers on several homes before yours is accepted.
On the other hand, if you buy in January, you have a bit more time to search. Homes typically stay on the market 19 days longer than Utah's annual average.
Average time homes spend on market in Utah
Annual average | 54 days |
January | 69 days |
February | 61 days |
March | 47 days |
April | 40 days |
May | 40 days |
June | 41 days |
July | 43 days |
August | 45 days |
September | 48 days |
October | 52 days |
November | 55 days |
December | 65 days |
Based on data from Realtor.com (October 2022) | |
» LEARN MORE: What should an offer include?
Step 7: Inspections and appraisals
Inspections and appraisals are an opportunity for you to better evaluate the home's condition and value before officially purchasing it. You may have an opportunity after this step to renegotiate the terms of your contract with the seller if something unexpected pops up.
🔑 Key takeaway:
- Inspections: A licensed professional checks the house for any unseen, unexpected, or potential issues.
- Appraisals: An appraiser hired by your lender examines the house to determine how much it's worth.
Home inspections in Utah
Having your Utah home inspected by a licensed inspector gives you peace of mind about the condition of the property before you commit thousands of dollars to purchase it.
Your inspector should check out the following parts of the property:
- Roof
- Foundation
- Electrical system
- HVAC system
- Plumbing
If the home has a septic system, you should also pay for a septic inspection to make sure it doesn't have any problems that wouldn't be covered in a typical home inspection.
Utah-specific inspections
Although Utah law requires sellers to disclose issues with a property to buyers, some problems may go unnoticed. To ensure a home is completely safe and move-in ready, homebuyers are strongly advised to conduct specialized inspections before closing.
In addition to a general home inspection, here are a few important tests you may want to consider:
- Radon testing: Certain areas in Utah are prone to elevated radon levels, which can harm your health if not mitigated quickly. If a seller hasn't done a radon test in the past year, you can order a free radon test kit from the Utah Department of Environmental Quality here.
- Termite inspection: Some lenders require buyers to have a pest inspection done, but this is a good idea for all homebuyers. Termites and other unwelcome critters can cause serious property damage and become health hazards for residents, so it's best for a professional to check for infestations.
Appraisals
Appraisals determine the value of the property. If you're using a mortgage to buy your new home, your lender will order an appraisal to make sure the home is worth the money that it's loaning you.
» LEARN: 3 options for buyers after a low appraisal
Step 8: Close on your new home!
🔑 Key takeaway:
Before you close on your new home, you and your agent will do a final walkthrough of the property to ensure that it's still in the expected condition.
To close on your Utah home, you'll have to meet at the title company to complete some paperwork and settle your closing costs.
On the closing date, prepare to review and sign several documents to finalize your loan and the title transfer. It takes most buyers about an hour to finish each of the forms, which will include:
- Your final loan application
- The deed
- The mortgage promissory note
- The disclosure statements
After the paperwork is finished, you’ll need to pay your closing costs. This part is pretty easy — the title company will collect the total sum you owe and distribute the funds to the correct recipients on your behalf.
To understand where your money is going, you can break your closing costs into four main categories:
- Lender fees: Fees paid to your lender for originating and underwriting your loan. Other fees related to your loan may also be included, like appraisal fees and survey fees.
- Title and escrow charges: Fees that the title company charges for conducting the title search and facilitating the closing process.
- Prepaid costs: Ongoing costs of homeownership, such as homeowners insurance and property taxes. Some lenders require new homeowners to pay for these expenses in advance.
- Other closing costs: Miscellaneous expenses that vary by homebuyer. A few common expenses in this category can include natural disaster certification fees and real estate attorney fees.
Buyers in Utah typically pay 3–5% of the purchase price in closing costs. For a $562,700 home — the typical home value in Utah — that's between $16,881 and $28,135!
Frequently asked questions
Utah does not require you to hire a real estate attorney to buy a home. However, depending on your circumstances, you might consider hiring one anyways. If you do, treat the process similarly to hiring an agent. Interview multiple attorneys and proceed with the one that best meets your needs.
- Save for down payment
- Get pre-approved for a mortgage
- Choose your preferred Utah neighborhoods
- Partner with the right real estate agent in Utah
- Go house hunting
- Make a strong offer
- Inspections and appraisals
- Do a final walkthrough and close
Yes, the Utah Housing Corporation (UHC) offers its FirstHome Loan program to first-time buyers, veterans, and single parents. Unlike most first-time homebuyer programs, the FirstHome Loan doesn't require participants to take a homebuyer education course.
To qualify, the borrower must have a credit score of at least 660 and not exceed the household income limit set for their county. Purchase price limits also apply and vary by county.
Why trust us?
Clever Real Estate is a free agent-matching service that has helped more than 82,000 people buy and sell homes. We partner with over 2,700 top-performing agents nationwide at national brokers including Keller Williams, RE/MAX, Century 21, and more. We also help buyers save thousands with cash back after closing — no strings attached.
We’ve earned buyers’ trust with a rating of 4.9 out of 5 starts on Trustpilot and over 1,800 customer reviews.
Our team of industry-leading researchers are committed to making homeownership more accessible by educating buyers through guides like this one. We've spent thousands of hours analyzing publicly available data, surveying consumers, and interviewing industry experts. Our research has been featured in The New York Times, Business Insider, Inman, Housing Wire, and many more.
Federal Reserve. "Housing Market Tightness During COVID-19: Increased Demand or Reduced Supply?." Accessed October 11, 2022. Updated July 08, 2021.
Consumer Protection Financial Bureau. "The Fed is raising interest rates. What does that mean for borrowers and savers?." Accessed October 11, 2022. Updated March 17, 2022.