SALT LAKE CITY (ABC4)- A new study by the Kem C. Gardner Policy Institute at the University of Utah reveals which areas in Utah saw the biggest spikes in home prices.
The study, which was called “The State of the State’s Housing Market,” said the state “faces a severe imbalance that creates record price increases for homeowners and renters.”
The COVID-19 pandemic made the housing situation worse, according to the study. A disruption in the supply chain for building materials along with “distorting demand through lower interest rates and increased liquidity” contributed to the state of home prices in Utah.
On a national scale, Idaho and Utah saw the biggest price jumps in the second quarter of 2020-2021, according to an infographic from the Federal Housing Finance Agency. Idaho’s prices jumped 37.1% and Utah’s prices jumped 28.3%.
The lowest price jumps were in North Dakota and Louisiana at 8.7% and 9.6% respectively.
The median home price of multifamily homes in Utah went up to just under $350,000 in the period between 2020 and 2021. Single-family home prices soared to $460,000 during the same period.
Sevier County saw the biggest spike in prices at 48.6% compared to Uintah County, which actually saw a 2.1% drop in home prices.
Homes in Salt Lake County spiked 20.5% from $365,000 in 2020 to $440,000 in 2021.
The report said that Utah’s homeowner wealth grew by $70 billion over the past year while more people took on more household debt. With home prices appreciating, it made buying a house “an attractive investment.”
So with all that said, is there still a housing shortage in Utah?
“A housing shortage occurs when the growth in households exceeds the growth in housing units, historically an uncommon condition in Utah,” the study said.
However, in 2020, Utah saw more households than housing units, with almost 32,000 households to roughly 24,000 housing units. In fact, the number of housing units in Utah has been dropping considerably between 2010 and 2020.
This led to low rental vacancies and not homeless households as one might expect.
“In other words, the shortage has removed vacant units from the housing market,” the study said, “an unhealthy condition leading to higher housing prices and rental rates.”
It will take several years for the gap between households and housing units to return to what the study calls “a healthy condition.”