For those of you hoping that the crazy housing market is just a bubble about to pop, the news is baaaaad. Home prices in February have shot up in Salt Lake County by a whopping 23% over last year with Utah County coming in at a record high of 30% in 12 months, Davis County up 25%, Weber County up 26% and Tooele County beating out all other areas by coming in at and increase of 43%.
The researchers and statisticians at the University’s Kem C. Gardner Policy Institute estimate that 67% of Utahans can’t afford a median priced single family home. The U.S. Census Bureau reported our total statewide population as 3.36 million in 2022. Sixty seven percent of that estimate would mean that 2.25 million of our neighbors can’t afford to live in this state. Where could you move to afford a home? Zillow estimates homes in Boise, ID average @$534,806 and in Phoenix, Az @$404,000. Realtor.com reports the average home price in Reno, NV is $555,000 and in Las Vegas $406,000.
You know gas prices for cars and trucks is insane right now and food prices just keep going up, up and up. Just before the pandemic in 2019, the annual inflation rate in the U.S. was 2.3%. In Feb. 2021 to Feb. 2022, that rate jumped to 7.9%-the highest since 1982. Meat’s poultry, fish and egg prices are up 13% in the last 12 months; fruits and veggies up 7/6%, gas prices up @8%. All this bad news adds up to everyone having a lot less take home pay at the end of the month.
If you had purchased a home last year your 30 mortgage rate would have been in the high 3% to low 4% rate. Now it’s jumping to around 5%. The payment on a mortgage of $500,000 has gone up almost $400 a month in just a year (principal, interest, taxes, insurance) from around $2700 a month at 3.5% to almost $3100 a month at 5%. That drastic increase pushes out many first time buyers who can’t qualify for the higher payment.
We are currently down tens of thousands of housing inventories to meet the demand of not just home buyers but also renters. This bubble won’t burst soon given that as of 3/17 we had only 515 properties for sale in Salt Lake County (all prices), with 10,500 members of the Salt Lake Board of REALTORS trying to put offers on these properties for their clients. In a normal market we’d have 2-3000 homes for sale. More people are moving to Utah that out of Utah and that alone puts immense pressure on housing inventory. Stacker.com reported this month that Utah has massive amounts of people moving here, from California, Colorado, Idaho, Arizona, and Texas in that order. Although we’re in a building boom we are definitely not keeping up with supply, nor does it look better in the next few years for anyone hoping to find a deal on their first home.