Bulging home sales driven by near record low mortgage rates, better employment levels than many other states and the lowest home prices in years are beginning to pressure home values in Utah. Average home prices are forecast to appreciate by the end of the year.
Five years after the housing bubble burst, the Utah housing market has slowly been making its way out of the bust in Salt Lake City, where home sales are moving at a brisk pace in many neighborhoods. Pent up demand and the lowest mortgage borrowing rates in history are driving the market. The 30-year fixed rate mortgage hit an average of 3.49% in late July, according to Freddie Mac.
Fewer discount priced foreclosures are also pressuring home values with a tighter inventory of homes for buyers. Single family home sales are up for the summer in Salt Lake City, which is now forecast to see home values appreciate an average of 2.4% for 2012.
|Salt Lake City||2.4%|
Banks are also cooperating with more homeowners who are unable to make mortgage payments in short sales, which should benefit the marketplace and help things stabilize over time. However, the housing market is taking a while longer to stabilize in Utah than many other areas of the country because most cities in the state saw their home values peak later than most other western states.
In Ogden, the second largest metro area in Utah, homes listed on the market are being priced more reasonably than in past years, according to local Realtors. Home sales have picked up and should remain stronger over the remainder of the year. Home prices fell during the first part of 2012, but are projected to budge higher an average of 2.1% through year end.
In Provo more people are finding work than many other areas of the country, allowing a greater number to qualify for home mortgages at lower affordable housing prices. Pent up buyer activity has led to a hike in home sales in Provo, which are projected to last the remainder of the year. Home prices are forecast to appreciate an average of 2.7% by years end.
With an estimated population of only about 49,000 year round residents, Logan is more remote than many other cities in the state. Home values weren’t impacted as harshly as more urban areas like Salt Lake, and values should take a while longer to begin moving higher again, which is why average home prices in Logan are forecast to climb only one-half of one percent for the year.