Mortgage rates over 7% are smothering the U.S. housing market, and Utah isn’t immune.

While home prices in Utah’s most populated Salt Lake County are still up year over year — they’re now down 7% from when they peaked earlier this spring. That’s according to the latest figures released Thursday by the Salt Lake Board of Realtors.

Home prices in Utah: Data from UtahRealEstate.com showed the median price of a Salt Lake County single-family home sold in the third quarter for $590,000. That’s still up 9% from the same time in 2021, but down 7% from $637,000, when prices peaked in the second quarter.

Utah County is seeing the highest home prices along the Wasatch Front, with a median price of $599,000 in the third quarter. Davis County ranked No. 3, with a median price of $540,000, a 9% rise over this time last year. Tooele County’s median price was $470,000, and Weber County’s was $435,600.

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As mortgage rates hover around 7%, the median monthly payment for Utah buyers has exceeded $2,600, according to calculations by Dejan Eskic, chief economist for the Salt Lake Board of Realtors. That’s priced out a startling 76% of Utahns from being able to afford the state’s median-priced home.

Home sales: The chilling effect of high mortgage rates hasn’t just impacted prices, according to Eskic.

He said there’s a silver lining for buyers (who haven’t been scared away by rates that have soared by more than 3 percentage points since last year).

Higher mortgage interest rates have definitely slowed house sales,” Eskic said in a prepared statement. “Active listings are taking roughly a month to sell instead of a week. The good news for buyers is that sellers are offering more concessions. There are more houses to choose from in the process and it is much easier to get a home under contract.”

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Single-family home sales in Salt Lake County dropped to 2,331 in the third quarter — down a whopping 30% compared to 3,336 sales this time last year. Single-family home sales also dropped in other Wasatch Front counties, according to the board of realtors.

Is the market crashing? Even though sales are down, people are still buying homes. Nationally, listings are still seeing multiple offers, with over 25% of home homes selling above list price due to limited inventory, according to the National Association of Realtors.

That’s a key difference between today’s market correction and the 2007 crash.

“The current lack of supply underscores the vast contrast with the previous major market downturn from 2008 to 2010, when inventory levels were four times higher than they are today,” stated the Salt Lake Board of Realtors in Thursday’s news release.

In rapidly growing Utah, a homebuilding boom last year made a significant dent in the state’s housing shortage — but housing experts say the state is still some 31,000 units short. That’s why they say Utah home prices may dip slightly, but because demand continues to outpace supply, they don’t expect a dramatic crash.

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Condo sales see even bigger drop: In Salt Lake County, condo sales fell 34%, and Davis County fell 24%. Tooele County saw the largest decline, with a 43% drop. Utah and Weber counties, however, saw “only negligible declines” at 1%, according to the board.

How are people still buying? Builders and sellers are getting creative to keep the market moving. Some are offering 2-1 buydowns, a type of financing that lowers the interest rate on a mortgage for the first two years before it rises to a permanent rate.

Homebuyers are also on stronger footing when it comes to negotiating. Some are asking sellers to pay for home repairs and home warranties, according to the board.