ST. GEORGE — Those looking to buy a house in Washington County now face a dramatic difference in the price of a monthly mortgage, according to a recent report.
According to data released by insurance and software review company Construction Coverage, homebuyers in the St. George metropolitan area pay 40% more per month in mortgage payments today than those who bought a home two years ago.
Construction Coverage researchers calculated the difference between the estimated monthly mortgage payment for a median-priced home in the current market compared to two years ago in all 50 states.
Nationally, average mortgage rates climbed from 3.8% to 6.8% in the last two years. The median home price rose from $316,778 to $347,716 across the country.
“Consequently, the monthly mortgage payment for a median-priced home in the United States is about 54% higher today than it was just two years ago — growing from $1,175 to $1,809,” the research states. “In St. George, the median home price climbed from $517,154 in 2022 to $519,858 today. Taking this median home price and the average 30-year fixed mortgage interest rate together, estimated monthly mortgage payments in the St. George metro have increased by 40.9% in just two years.”
Breaking down the data even further, the Construction Coverage research estimated monthly mortgage payments of $1,919 for a median-priced St. George area home in 2022. The review company concluded the Southern Utah portion of their mortgage research on a positive note.
“Prospective homebuyers today would face monthly payments of $2,705 per month,” researchers said. “Even still, among all small United States metros, the St. George metro has experienced the 13th smallest estimated mortgage payment increase over the last two years.”
Southern Utah-based research
When asked by St. George News about the accuracy of the research, Washington County Board of Realtors CEO Emily Merkley used local sales data to produce her responses to the questions posed.
She said most of the increase in Washington County mortgage payments is due to increasing federal interest rates on home loans. Merkley said the average interest rates for the St. George metro over the last four years are as follows:
- 2021 – 2.96%
- 2022 – 5.34%
- 2023 – 6.77%
- 2024 – 7.87%
Currently in Washington County, the average sales price of a home is $626,094, Merkley noted. Based on the historical interest rates, a monthly payment using today’s average home price and past interest rates would look similar to this:
- 2021 – 2.96% – $2,626
- 2022 – 5.34% – $3,492
- 2023 – 6.77% – $4,069
- 2024 – 7.87% – $4,537
Merkely stressed that she calculated the estimated payments based on a 30-year mortgage with 0% down, principal and interest only — not including taxes and insurance.
“As you can see, since 2021, they have most certainly risen 40% in terms of the monthly mortgage payment — in the past two years, at least 25%,” Merkley said. “When we apply this across all of residential real estate, homeowners are certainly cost-burdened due to housing costs, mainly interest rates.”
Federal interest rates charged to homebuyers can impact more than the amount paid back in interest on a loan for those pondering the purchase of a home, she added.
“Interest rates dictate a household’s purchasing power,” Merkley said. “At current interest rates of 7.87%, a person who can spend $3,000 on their monthly mortgage is capped at $415,000. But if interest rates were, say 4.5%? That household’s purchasing power jumps to $585,000.”
While responding to a question from St. George News on the PBS Utah Governor’s Press Conference program in Salt Lake City, Gov. Spencer Cox previously named housing as one of the more serious short-term problems the state is experiencing.
“Right now, the issue that is my top concern and keeps me up the most at night is the state of housing and especially affordable housing in our state,” Cox said.
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