SALT LAKE CITY, Utah (ABC4 News) – The demand for housing only continues to increase in the state but demand is outpacing supply and the industry are trying hard to keep up.
According to experts, there are several factors as to why the housing market is increasing. Utahns have high confidence in the state’s future and economy. Jobs are strong, unemployment is flat and Utahns see healthy growth in the state, according to the new consumer index.
“People are feeling good about their homes and their investments, they’re seeing their home prices go up,” said Chad Berbert, an economic consultant to Zions Bank and principal at the Cicero Group.
Many Utahns are optimistic about the increasing values of their homes and many expect their home prices to increase over the next year.
Housing prices across Utah have also increased about 3% along the Wasatch Front between March and April, 2017.
“Confidence in the labor market remains high as 60% of consumers describe currently available jobs as plentiful. That’s up from 50% last month and 60% of Utahns think there will be more jobs available in their area six months from now,” said Berbert.
Figures are based out of the Utah Consumer Attitude Index which were based on a survey done in May of 500 households. Experts also say a positive outlook on the housing market is due to Millennials jumping more and more into the mix.
“Millennials are starting to buy. In 2016 Utah county was cited by Fortune Magazine as the top place in the country where Millennials are putting down roots and actually buying homes and taking out mortgages,” says Berbert.
Utah has also seen the second highest growth in the country in new Millennial homebuyers.
“We’re starting to see them come back,” says Jacob Ballstaedt, a land acquisition and entitlement manager at Garbett Homes. “We keep seeing them come back, they need to keep buying homes and we want to sell more to them.”
However, home prices continue to go up and so is rent.
“USA Today reported that 80% of renters spend 80% of their income on rent and many spend quite a bit more when the cost of mortgage is less than rent, it’s easier for renters to make the switch and we anticipate that will continue to drive home price increases, development, construction here within the state,” said Berbert.
There are 8 states where renting is still more affordable than purchasing a home and Utah is one of those states, says Berbert.
“However, increasing competition for rental properties is raising rates in the Beehive state and may be pushing renters more towards buying,” he said.
Evenmore demand for homes is outpacing supply. That being said, all eyes are now on the construction industry.
“Is there enough construction happening that will kinda level out the housing increases or are home prices going to continue to increase because the supply is restricted in some way,” says Berbert.
Fortunately, experts say, there is still a lot of available along the Wasatch Front and developers like Garbett Homes say they’re working to build as fast as they can, but it will take some time.