Utah’s economy forecasted to stay strong, aside from home prices

SALT LAKE CITY — Utah’s economic council forecast for next year shows some slight changes in factors like state population and the unemployment rate, but the most concerning factor is an uncertainty with how much home prices will change.

Expected changes for 2025

The Utah Economic Council creates a forecast each quarter with the Kem C. Gardner Policy Institute on how the US and state business and general economy is expected to change over the upcoming months. The September forecast, released last week, involves several minor changes.

According to the forecast:

• The Utah employment rate is expected to increase from 3.0% to 3.2%
• Utah net migration is expected to decrease from 19.5 to 18.3 thousand
• Utah average annual pay is expected to increase 3.5%
• U.S. unemployment rate is expected to increase .3%

Senior Public Finance Economist for the Gardner Policy Institute, Maddy Oritt, said despite the minor changes, Utah’s economy looks strong.

“We have really strong economic fundamentals, really strong labor market, really strong consumer spending and consumer activity,” she said. “So for now, we’re expecting to just continue to strengthen our economy for the foreseeable future.”

Uncertainty with home prices

While the data is looking promising for various aspects of Utah’s economy, the one area filled with uncertainty is home prices.

“We’ve got some economists thinking we’re going to have up to seven percent home price growth this year and next year, you’ve got some economists thinking only one or two percent home price growth,” said Oritt.

A wide range of predictions is what makes home prices so unpredictable, especially with the federal government cutting interest rates.

“Especially with the fed now starting their rate cutting cycle I think there is some uncertainty about what we’re going to see as far as home prices go in the next 12 to 18 months,” she said.

Home prices are one of the biggest risk factors to look for over the next year because they affect Utahns more than just deciding where to live.

“[It] has a big impact not only on people living in Utah maybe trying to make a transition to a different home,” said Oritt. “[It’s] having a pretty significant effect on attracting and retaining labor in Utah. So I think that’s probably our biggest risk”

National and statewide strengths and weaknesses

The Utah Economic Council also deliberates the largest strengths and weaknesses for the nation and for the state each quarter.

The largest expected national economic weaknesses include:

• The upcoming election and political uncertainty
• High interest rates
• Federal debt and finances

Utah’s weaknesses largely revolve around home prices and uncertainty:

• Housing price and supply
• Cost of living/affordability
• Low wage growth

The three top national strengths forecasted by the Economic Council for the next year are:

• Loosening monetary policy
• Labor market strength
• Easing inflation

Top state-wide strengths include:

• Business-friendly environment
• Labor market strength
• Strong economic fundamentals

Overall, Oritt said it is impossible to exactly predict the economic future of the state and the nation, however indications are showing a positive trend for 2025.

“We think the economy is really strong in Utah, and Utah tends to outperform the national economy,” said Oritt.