Now Offering Utah Housing!
We are excited to announce we are now offering Utah Housing for first-time home buyers!
Due to the highly competitive market, it’s a harsh reality that first-time buyers might need an extra boost to gain entry into the market. This Utah Housing program can give them the support they need!
The program is dedicated to increasing accessible and affordable housing throughout the state of Utah, which is why they offer several mortgage loan programs to help first time buyers be able to purchase a home. These 30-year fixed-rate loans range from FHA and VA loans to conventional loans.
If cash at closing is a problem for you, the Down Payment Assistance Second Mortgage program could help you purchase with little to no cash investment. Basically, it’s like taking out a first and second mortgage, and the second mortgage covers your down payment.
A client of ours that used the Utah Housing program for their down payment had this to say, “Working with ALV made the initially terrifying process of buying my first home feel so much more doable. They connected me with a great program that assisted me with my down payment, which made all the difference when I submitted an offer on the home we loved. I’m grateful for the team’s patience in explaining everything to me and always being available for phone calls when I needed clarification. ALV did a great job working with us through the process and helping us make our first home purchase a possibility.”
We can provide the same experience for you! We’ll take the time to explain the ins and outs of the program and be readily available to answer any questions you may have throughout the process.
If you are worried that your lack of down payment may affect your chances of competing in the market, although it can be a challenge there are programs like this out there that are dedicated to helping more first-time buyers get homes.
If you think you or someone you know could benefit from this program, reach out and let’s review your situation, and get you qualified so you can begin your home search!
Unemployment skyrocketed in the United States at the beginning of the pandemic due to continued stay-at-home orders, business closures, health concerns, and reduced demand for products and services. As a whole the country’s unemployment rate has seen little signs of improvement, but when you look at state levels, Utah is doing extremely well.
Utah currently has the second lowest unemployment rate in the country at 4.1% according to the U.S. Bureau of Labor Statistics. Utah’s rate is less than half of the national rate of 8.4%. This means many of those who were furloughed or laid off at the beginning of the pandemic are getting to return to work. The Salt Lake Chamber reports that weekly unemployment claims in Utah have steadily declined for the last 16 weeks.
“Utah’s economy continues along its path of improvement,” reports Mark Knold, Chief Economist at the Department of Workforce Services. “The unemployment rate dropped in August and remains one of the nation’s lowest. It speaks to the energy and prospects within the Utah economy.”
Utah’s economy has done a lot to recover, but it still has a long way to go. Travel and tourism, as well as restaurants took a hard hit in Utah and are not expected to recover for years to come.
While some industries are struggling in the pandemic economy others, like the housing market, are doing quite well. When the pandemic first hit in April there was a big drop in real estate transactions, but the market has since recovered.
The current market is an insane seller’s market. Historically low interest rates and a shortage of inventory has kept the housing market moving this year. There was an unusually high demand from buyers during the homebuying season. Buyers are wanting to move faster to beat out other buyers and lock in a low interest rate.
There has even been an increase in new construction home sales. Utah’s construction industry increased by 7.4% and continues to be Utah’s fastest growing industry over the past 12 months, as reported by the Salt Lake Chamber.
The housing market is thriving so far this year, but what could the second wave mean for the market? Well we can make a few predictions from what we know.
The Federal Reserve has said interest rates are expected to stay low for the next few years. With low interest rates still fueling the purchasing fire, the demand for housing is expected to remain strong for the rest of 2020.
Due to the extreme buyer competition and shortage of homes for sale, home prices have begun to rise and could continue to rise further. In August, the median home price in Utah was $362,000, which is $37,000 more than 2019.
When a market has low inventory, people are willing to pay more for a home in order to beat out other buyers competing for the same home. Sellers are finding the ball in their court in this market, as they are able to price their home competitively to get the best price for their home.
The high demand from buyers and low inventory is expected to continue so we can expect to see home prices move up.
With the pandemic continuing to put many people out of work we can also expect to see an increase of homeowners that will default on their mortgages and be forced into foreclosure. Although foreclosures are not expected to reach anywhere near the level we saw in the 2008 Great Recession, we can still expect to see a few people affected.
And let’s not forget we have the impending presidential election this November. We all know the political climate can greatly impact the housing market, so it will be interesting to see which direction the election goes and how that affects the housing market moving forward into 2021.
If the coronavirus pandemic has taught us anything it is that life can change at any moment. Although we don’t know exactly what to expect from the rest of 2020 by understanding the current trends and economic climate, we can have a better prediction of what’s to come.
In March, researchers at the Kem C. Gardner Policy Institute found that our current market conditions are threatening to cause a crisis in Utah based on a growing housing shortage, while current home prices continue to appreciate.
The Wasatch front housing market is stronger than ever with an increasing demand for both single family and multifamily rental units through the northern part of the state. New research shows that demand has outpaced wage growth which is causing a greater rift in affordability. Studies show that median home prices during the first three months of 2018 were not affordable for average wage earners in about 68% of the counties included in the US report.
Incomes in Utah have failed to keep pace with interest rates, the report noted. The report also defined housing affordability as a unit where an owner or tenant pays no more than 30 percent of their household income toward housing costs — rent or mortgage.
Davis, Utah and Weber counties, which are located along the Wasatch front rated less affordable than any prior quarter average during the first three months of 2018, while Salt Lake county was equal to its historic affordability index.
Affordability often suffers during booming economic cycles, which frequently outpaces incomes for at least the start of these growth spurts. The risk is that individuals and companies could pull out of the area when they are no longer able to operate or live because of the expensive housing.
Home values are going up quickly [but] the negative side of that is that the homes themselves are also becoming less affordable. Three factors that could help improve affordability in the short term are things like decreasing home prices, increasing wages and although cited as the least likely to happen, decreasing interest rates.
However, the Wasatch front is still a more reasonable market than other large surrounding urban areas like Northern or Southern California, Las Vegas, Seattle or even Denver. Housing prices in Utah will continue to increase at rates well above the national average due to relatively high rates of population and economic growth. As long as the state is considered a bargain for some other competitive markets, we will probably see home prices continuing to grow and affordability continuing to be an issue.
