Utah continues to be one of the states attracting the largest number of new residents, according to the U.S. Census Bureau. Recent reports indicate that housing growth led the U.S. from 2016 to 2017, boasting a 2.1 percent increase with 22,177 new homes. While this growth creates new opportunities for Utah residents, it also creates challenges for those seeking to purchase a residence.
Tracking the Trend
The simple facts are that all indications point to an ongoing rise in the price of homes in Utah. Over the past 26 years home prices have risen an average of 3.3 percent per year, outpacing all but three other states. This compounding effect is the reason first-time buyers are now facing prices of more than $350,000 for starter homes. This compares to just $160,000 in 2004.
While it is difficult to accurately project the overall real estate market, one study by the Kem C. Gardner Policy Institute at the University of Utah projects a stunning possible future. The study, explains institute employee Dejan Eskic, predicts that those trends could result in an average price of $1.3 million for a Wasatch Front entry-level home by 2044.
Understanding the Economics
Unfortunately, many potential home buyers are intimidated by these economic realities, and they reconcile themselves to renting rather than buying their first home.
While renting is a viable options for some situations, it only adds to the challenge for those who desire to own. Even a 3 percent increase in price over a year can add as much as $10,000 to the purchase price of a home, and greatly increase the down payment needed.
Multiplying those numbers out over just three or four years provides ready evidence of the real cost of waiting to buy a home.
While rising prices create challenges for new buyers, they also create greater incentives for purchasing a home as early as possible.
If you are currently renting there are many options for low down and $0 down payment loan programs. Don’t let home prices rise to $1.3 million and regret not buying your first home now. Call me to get qualified today.