Housing market continues to sizzle
It may be the end of summer, but Utah’s hot housing market doesn’t appear to be cooling down.
Utah real estate continued its exceptional bounce-back from the pandemic shutdowns with a nearly 8% gain in closed home sales and a whopping 24% increase in pending sales.
Utah Realtors sold 5,966 properties in August, up from 5,544 sales during the same month last year. That’s according to new numbers from the Utah Association of Realtors.
So far, home sales are up 3% for the year. That’s no small feat considering that 2019 holds the record for the most houses sold in Utah in a single year.
“While I did very much expect the housing sector to be stable during the pandemic-induced economic shutdowns, I am pleasantly surprised to see the industry bounce back so strongly and so quickly,” said Lawrence Yun, chief economist of the National Association of Realtors in a press release about U.S. home sales.
The U.S. housing market is experiencing a similar rebound with August transactions up 10.5% from a year ago and pending sales up 24%.
“Home sales continue to amaze, and there are plenty of buyers in the pipeline ready to enter the market,” Yun said. “Further gains in sales are likely for the remainder of the year, with mortgage rates hovering around 3% and with continued job recovery.”
With the surge in pending sales, which represent properties that are under contract, Utah home sales are also likely to remain strong in the coming months as those transactions are finalized. Buyers are also expected to continue to benefit from affordable borrowing rates.
“Tremendously low mortgage rates — below 3% — have again helped pending home sales climb in August,” Yun said. “Additionally, the Fed intends to hold short-term fed funds rates near 0% for the foreseeable future, which should in the absence of inflationary pressure keep mortgage rates low, and that will undoubtably aid homebuyers continuing to enter the marketplace.”
Another sign of the strong interest in the housing market is the surge in prices. The median price of homes sold in Utah increased nearly 11% in August, marking 101 straight months of year-over-year gains. At $360,000, the median is $35,000 higher than it was in August 2019.
On the national level, prices are also up 11% to $310,600.
A lack of housing inventory is pushing prices up. In Utah, the number of homes for sale fell 45%. At the end of August, there were only about 8,000 homes for sale, which is a record low. If there were no new listings, the supply of Utah homes for sale would be depleted in less than two months — another record low.
“Housing demand is robust but supply is not, and this imbalance will inevitably harm affordability and hinder ownership opportunities,” Yun said. “To assure broad gains in homeownership, more new homes need to be constructed.”
While inventory has been scarce over the past few years, the problem has worsened due to home construction challenges.
“Over recent months, we have seen lumber prices surge dramatically,” Yun said. “This has already led to an increase in the cost of multifamily housing and an even higher increase for single-family homes.”
The demand for housing has also surged as people’s housing needs have changed during the pandemic.
“The past few months have shown how valuable real estate is in the country, both to our nation’s economy and to individuals who have been given an opportunity to rethink their location and redesign their lifestyle,” said Vince Malta, president of the National Association of Realtors.
In this competitive landscape, it’s more important than ever for buyers to work with a Realtor who can help them secure a home. To find a Realtor who works in your neighborhood, visit MyRealtorStory.com.