Utah home sales break records after pandemic shutdowns
Even the spring pandemic shutdowns couldn’t slow Utah’s hot housing market for long as new numbers show a record-setting summer for real estate in the state.
Utah Realtors broke a record for the most homes sold in a single month, selling 5,799 properties in June. That’s up nearly 13% from June 2019 and the highest number on Utah Association of Realtors records dating back to 2003.
Year to date, statewide sales are down only 2%, even with the sharp drop in activity during the shutdown.
Sales activity in the coming months appears to also be strong. The number of contracts signed to buy Utah homes skyrocketed in June, rising nearly 21% from 2019. With 6,383 Utah real estate contracts signed, this number is the most pending sales ever recorded in a single month, according to the Utah Association of Realtors.
Similar trends are happening across the country, where U.S. pending sales rose 6% in June.
“It is quite surprising and remarkable that, in the midst of a global pandemic, contract activity for home purchases is higher compared to one year ago,” said Lawrence Yun, chief economist of the National Association of Realtors, in a recent press release. “Consumers are taking advantage of record-low mortgage rates resulting from the Federal Reserve’s maximum liquidity monetary policy.”
In Utah, the median sales price increased 6% to $345,000. This is also a record-breaking figure as the highest median price on UAR records. It is the 99th straight month of year-over-year gains.
U.S. home prices also increased, with the median rising 3.5% to $295,300 in June.
“Home prices rose during the lockdown and could rise even further due to heavy buyer competition and a significant shortage of supply,” Yun said.
As a result of the strong performance, the National Association of Realtors has raised its forecast for the market. Yun expects U.S. home prices to increase 4% in 2020 and 3% in 2021.
“The sales recovery is strong, as buyers were eager to purchase homes and properties that they had been eyeing during the shutdown,” Yun said. “This revitalization looks to be sustainable for many months ahead as long as mortgage rates remain low and job gains continue.”
The effect of low mortgage rates is providing a significant boost to housing market activity. Even though Utah home prices have increased 6%, homes are actually more affordable today than they were last year because of record-low interest rates.
According to the Utah Association of Realtors Housing Affordability Index, housing affordability increased 4% compared to June 2019. A Utah household making the median income has 101% of what is needed to qualify for the median-priced home under prevailing interest rates. That’s up from a reading of 97 last year and 100 in 2018.
The National Association of Realtors is predicting that mortgage rates will stay near 3% over the next 18 months.
One of the biggest challenges in the current market is the housing shortage. The inventory of Utah homes for sale fell 31% in June. This is a record for the fewest properties available, even though the state’s population has significantly increased during the 17 years that the Utah Association of Realtors has tracked the data.
At the end of June, there were 2.1 months of inventory, which is a strong seller’s market.
To learn more about market conditions in your own area and neighborhood, contact a local Realtor. A directory of Utah Realtors is available at MyRealtorStory.com.