(ABC4) – It’s no secret that 2021’s housing market was hot, especially in Utah. With many new residents moving in from out of state and wanting to purchase homes, prices skyrocketed. But new Utahns aren’t the only ones eager to buy.
A recent survey by Coldwell Banker suggests that 82% of unmarried Americans would rather spend money on a home than on a wedding. Dani Griffith, a Salt Lake-based realtor, says that she believes the pandemic played a large role in this cultural shift.
“A lot of their wedding dates were pushed back, so they had that chance to really reconsider their plans and decide whether they want to put $30,000 towards and wedding or $30,000 towards a home,” she says. “I’ve seen an influx of my clients choosing the homeownership route and pushing back the wedding to a further date.”
And though this trend is nationwide, it has specific implications for Utah’s housing market, which has ranked No. 2 in the nation for year-over-year price increase.
“We’ve got a huge inventory shortage here in Utah. We’ve got a whole lot of buyers and not enough sellers, so we are feeling the effects of pricing,” Griffith says.
And with home prices as high as they are, even if younger Utahns hope to become homeowners, how will they afford it?
Griffith, who has worked with many first-time buyers, says there are many options, and the market outlook might not be as dismal as younger generations think.
“Interest rates are killer for our younger buyers currently, so it does increase their purchasing power,” she says. “Lower interest rates equal more that they qualify for and less interest that they are paying. So that helps a lot.”
She also recommends getting in contact with a real estate agent who can help talk through things like loans and various down payment assistance programs that may be available. She says that, through working with a realtor, prospective buyers can get in touch with a loan officer for no additional cost.
“Nine out of ten first time homebuyers that I work with are shocked that they can actually qualify for a home with not a ton of money out of pocket,” she says.
She also encourages first-time buyers to reach out to an agent early, even if they don’t plan to purchase a home in the immediate future. She says that a realtor can help set goals and talk through the steps that can be taken to achieve them.
“Start the conversation so we can help you make a game plan,” she says. “We can help you, whether it’s a right-now thing or a couple years down the line.”
And as far as what’s coming down the line, higher prices in Utah might just become the norm. Griffith says that as more Millenials and members of Gen Z pursue homeownership, the demand will continue to increase. And with economists not foreseeing a market downturn, it may remain a seller’s market for years to come.
“None of us have a crystal ball, so we can’t accurately predict, but what we are finding is people want to live in Utah,” Griffiths says. “The secret’s out. People are moving here and people want to own here.”
So for members of the younger generation that may have purchased previously, the market boom was a stroke of luck. Home values in Utah increased by 28.3% between the second quarter of 2020 and 2021, according to an infographic from the Federal Finance Housing Agency. This means that folks who purchased a first home before values skyrocketed have accrued equity in their properties at a much faster rate than anticipated, and will be able to upgrade to larger or more desirable real estate sooner.
But despite it all – and taking into account the possibilities that come with low interest rates – Griffith thinks that young buyers shouldn’t necessarily beware.
“Homeownership is scary,” she says. “It’s a big deal, it’s a big purchase, but we want to make this a feasible option.”