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Market Updates for September 2023

Market Updates for September 2023

As we step into September, we begin the slow annual transition from facilitating move outs and filling vacancies to preparing the portfolio for winter and adding new features and processes to better serve our customers. We have a lot of exciting features planned and will be announcing those in the weeks and months ahead. In this month’s update, we'll discuss the impacts of a cooling job market, highlight what looks to be the end of monthly rent declines, and take a look at both the national and local real estate markets. 


August Jobs Report - The US economy added 187,000 jobs in August, which is more than expected, but the unemployment rate rose to 3.8%, up significantly from July and the highest since February 2022. The “real” unemployment rate, which counts discouraged workers as well as those working part-time for economic reasons, jumped to 7.1%, a 0.4 percentage point increase and the highest since May 2022. Average hourly earnings rose 0.2% for the month and 4.3% from a year ago, both slightly below forecasts. This intricate interplay between employment dynamics and the Federal Reserve's ongoing efforts to combat inflation underscores the importance of considering both consumer spending and employment trends in the broader economic context as the Fed adjusts credit availability and cost to achieve its monetary policy objectives.

Weekly Jobless Claims - The latest U.S. Initial claims for state unemployment benefits fell 13,000 to 216,000 in the week ended September 2 from a revised 229,000 in the prior week, marking the lowest level since February indicating an unexpected positive trend in the labor market. In contrast to the decline in new filers nationally, the local report for Utah showed that initial claims in the state advanced to 1,553 from the previous week's 1,429, indicating a change of 8.7%. This data underscores the broader national trend of resilient employment market conditions, suggesting that Utah - like the rest of the country, has not seen a significant downturn in the labor market despite multiple rate hikes.

Consumer Price Index - Unfortunately our publication deadline will precede the release of the August Consumer Price Index (CPI) report. As a review of last month's report for July’s data, we observed that consumer prices experienced a year-on-year increase of 3.2%, falling slightly below initial expectations.  The primary contributor to monthly inflation was increase in shelter costs, resulting in a year-on-year rise in housing expenses. Inflation has moderated from mid-2022 highs, it remains significantly above the Federal Reserve's 2% target. This suggests a likely pause in interest rate increases but might not be enough to shift to potential rate cuts. The next report update is scheduled for September 13th, and we will give you a full report including August’s numbers and how it impacted the upcoming Fed meeting in next month’s update.

Fed Meeting - So far there has not been a new Federal Reserve meeting, with the next one scheduled for September 19-20. To recap  the last Fed Meeting, the Federal Reserve made its 11th interest rate hike since March 2022, pushing benchmark borrowing costs to the highest level in more than 22 years with a quarter-point increase, establishing a target range of 5.25%-5.5%. Despite this, the economy continues to show resilience, with positive inflation data and consumer sentiment. Certain inflation measures exceed the 2% target, underscoring the complexity of the current economic landscape. Economic growth remains stable, with second-quarter GDP registering at a 2.4% annualized rate and a relatively low unemployment rate of 3.6%. The Fed's upcoming September meeting will determine whether rates continue to rise and will be highly influenced by the August Jobs report and next week’s CPI data.

Updated 2023 Predictions for the National Housing Market

The following statement should surprise absolutely no one at this point: The housing market is experiencing challenges due to soaring mortgage rates and skyrocketing home prices. August saw the national average 30-year fixed mortgage rate peaking at 7.23%, before settling at 7.18%. This is making things tough for potential buyers, and as a result, existing monthly home sales fell by 2.2% year over year (reaching a six-month low) in all major U.S. regions. Despite these hurdles, strong demand, limited housing inventory, and homeowners with low-interest rates opting to stay in their homes have kept most markets competitive, increasing the ongoing affordability crisis and leaving many prospective homebuyers on the sidelines. Looking ahead to September 2023, the housing market is expected to remain weak due to high mortgage rates, elevated home prices, and constrained inventory. This is exactly what has played out locally with the average sold price essentially flat for four straight months. Additionally, the uncertainty of inflation and the potential for further interest rate hikes by the Federal Reserve only adds to the market's challenges. After all, the Fed has raised rates 11 times since March 2022 and has reiterated plans to continue until inflation better aligns with their 2% target. These factors collectively create a difficult environment for prospective homebuyers and continue to negatively impact the housing market, but we seem to have at least reached some level of stability locally with values essentially flat year over year.

Fed's Uncertainty Amidst Rising Mortgage Rates

As 30-year fixed mortgage rates surge in response to the Federal Reserve's recent rate hike, and with projections of another increase by the end of 2023, the housing market faces increasing uncertainty. At this point, experts are expecting mortgage rates to remain above 6% for the rest of the year and all eyes are on the upcoming September 19-20 Fed meeting where policymakers will evaluate recent economic data to determine whether to maintain the status quo or raise rates yet again. Keith Gumbinger of emphasizes that the Fed's long-term rate intentions hold greater significance than immediate actions, as the impact of another quarter-point hike may be limited. What everyone wants is clarity regarding how long rates will remain elevated and the potential for future rate cuts will significantly influence the mortgage market's trajectory.

Navigating the Housing Market: Recovery Challenges and Affordability Concerns

The housing market's path to recovery hinges on key factors, including the need for increased housing inventory to ease soaring home prices while gradually cooling interest rates to prevent excessive demand and price spikes. Ideally, mortgage rates should stabilize in the upper 4% to lower 5% range, but with current rates above 7%, this may take time. Despite a slight uptick in mortgage originations in Q2 2023, experts anticipate a subdued market for the year's remainder due to declining existing-home sales driven by rising rates and limited inventory. However, there's optimism for a potential housing market upturn if mortgage rates begin to fall, possibly reaching around 6% by year-end. Overall though, the housing market faces significant challenges surrounding affordability. New single-family homes have emerged as a bright spot, narrowing the price gap between existing and new homes, but overall inventory remains below historical averages, making a 2023 resolution unlikely. While mortgage rates exceeded 6.75% in July, new home sales rose due to a substantial increase in new home purchase mortgage applications, though affordability concerns persist, especially for first-time buyers contending with rising costs and limited affordable options.

Will the Housing Market Crash in 2023?

Despite rising mortgage rates, the U.S. housing market showed resilience between April and June, with marginal month-over-month price increases. The National Home Price Index reported a zero year-over-year change, suggesting that home prices have remained strong in 2023, although elevated mortgage rates are expected to constrain further price gains for the rest of the year. This is exactly what we’ve seen in Utah’s data as well. With that said, regional variations persisted, with Midwest and New England markets outperforming pricier areas. While some West Coast markets experienced price declines, the likelihood of a housing market crash remains low, as today's homeowners have more equity in their homes compared to those during the 2008 financial crisis. Furthermore, foreclosure filings decreased month over month, signaling a rebounding housing market, but experts remain cautious about predicting the trend's longevity due to ongoing market unpredictability. Despite a year-over-year increase in foreclosure rates, a wave of foreclosures in 2023 is not expected, as nearly half of U.S. mortgage-owned residential properties have substantial equity, providing homeowners with a buffer against foreclosure.

Ultimately, market conditions look to be in a far better place than this time last year. With inflation coming down, the job market cooling from recent highs, and home prices stable, we hope to see a very different landscape over the next 12 months. If interest rates can reverse course and come down to ease buyer payments, we will likely see that pent up demand manifest itself in a modest rebound for home values.

Utah Real Estate Market

The Utah real estate market's median sold price fell by 0.68% both month over month and year over year, but has rebounded 9.0% from January’s lows. The sold count increased by 5.76% from the previous month but remained 15.64% lower year over year. The average number of listings in Utah fell by 13.06% from the prior month and is just over 13% lower than this time last year. The Utah housing market seems to have found an equilibrium of sorts lately with stable transactional numbers and values.

Median Sold Price*

Sold Count*

Average # of Listings*

August: $590,000

September: $591,750

October: $570,000

November: $550,000

December: $550,000

January: $536,500

February: $550,000

March: $555,628

April: $567,750

May: $585,000

June: $590,000

July: $590,000

August: $586,000

August: 1,720

September: 1,582

October: 1,211

November: 1,111

December: 1,163

January: 835

February: 1,113

March: 1,454

April: 1,308

May: 1,518
June: 1,522

July: 1,372

August: 1,451

August: 5,539

September: 5,874

October: 6,037

November: 5,754

December: 5,034

January: 4,143

February: 3,662

March: 3,333

April: 3,350

May: 3,480
June: 4,022

July: 5,522

August: 4,801

Monthly Change: Down 0.68%
Year Over Year: Down 0.68%

Monthly Change: Up 5.76%

Year Over Year: Down 15.64%

Monthly Change: Down 13.06%

Year Over Year: Down 13.32%

* all graphs/data are for single-family homes in Salt Lake, Utah, and Davis Counties. 

Rent Report

The Rent Report shows that the national rental market continued to slow down in August, with both annual and monthly rent growth turning negative. The rental market in Utah is experiencing a decline in prices year-over-year, with many cities reporting negative rent growth but has stabilized as of late. Month-over-month rent growth stats back this up with several cities, including Murray, North Salt Lake, and West Jordan, showing positive rent growth which indicates a slight rental market recovery from July to August.


Month Over Month
 Rent Growth

Year Over Year
 Rent Growth


North Salt Lake


Salt Lake City


South Jordan

West Jordan















*Rental data provided by apartment list.

Industry Updates

Record High for Multifamily Construction.  Multifamily permits, starts, and completions declined, but there’s a silver lining in the data: a record-high 986,000 multifamily units are under construction, marking a 1.1% increase, the highest level since 1970. Permits for buildings with five or more units dropped 0.2% from June and 32.2% year over year, while multifamily starts remained stable month-to-month with a slight year over year increase of less than half a percent. Completions, however, fell sharply by nearly 40% from June and 23.3% from July 2022. Despite these challenges, multifamily developer confidence remains positive, with both indices of the Multifamily Market Survey (MMS) from the National Association of Home Builders (NAHB) registering readings above 50 in the second quarter. Demand for multifamily housing remains strong due to the limited availability and high cost of single-family homes in many markets. However, builders and developers face obstacles in new development and project approvals in various parts of the country.

FHFA Closes RFI on Tenant Protections, Flooded with Public Comments. In July 2023, the FHFA concluded its Request for Input (RFI) on potential regulations for landlord and tenant rules in enterprise-backed multifamily properties. This sparked a significant response, including support from seventeen U.S. Senators advocating for conditions like federal rent control and tenant organizing rights. The National Apartment Association (NAA) played a vital role, highlighting concerns about potential impacts on housing production and affordability. They noted that excessive regulations could discourage housing providers from using Enterprise-backed financing, citing survey data indicating the risk of higher financing costs with alternative funding sources. NAA also mobilized its members, with over 3,000 sending letters opposing a one-size-fits-all approach to landlord and tenant laws. Looking ahead, NAA expects FHFA to announce its next steps in the fall and remains committed to advocating for responsible solutions to housing affordability challenges.

Real Estate Investing Resources

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