I have a question for you more mature homeowners — the ones who have owned a home for a few years.
If you had to buy your house today, at current prices, could you afford to do so?
A recent survey by the Utah Foundation, an independent, nonpartisan and nonprofit research organization, found only 37% answering yes.
I would have to be a “no,” especially after seeing a sign on a newly built home along a busy street near my neighborhood, next to a middle school and across from a strip mall, asking for more than $700,000.
If you had to buy your house today, at current prices, could you afford to do so?
A recent survey by the Utah Foundation, an independent, nonpartisan and nonprofit research organization, found only 37% answering yes.
I would have to be a “no,” especially after seeing a sign on a newly built home along a busy street near my neighborhood, next to a middle school and across from a strip mall, asking for more than $700,000.
Which leads to a followup question. How, then, is Utah ever going to solve its housing crisis, which the Foundation’s newest report — the latest in a series on Utah’s growth and quality of life — defined as a demand for 44,500 more housing units than are currently available?
That one is a bit harder to answer, although it ought to be occupying the minds of every state and local elected official.
That is especially true at a time when inflation can properly be described as rampant. Nationwide, it was at a 6.2% annual rate in October. In Utah, it was 7%.
Miles Hansen, President and CEO of World Trade Center Utah, recently told KSL that these higher prices are particularly being felt in Utah’s housing market, which shouldn’t come as much of a surprise.
The Utah Foundation report puts this in a useful perspective. From 2010 to 2021, the mortgage payment on a median-price home in Utah increased from $1,131 to $1,600, adjusted for inflation.
There is good news. On the other side of the ledger, Utah actually led the nation in income growth over those 11 years, at 3.4%. By one measure, this has more than kept pace with the money needed for a mortgage payment.
But with inflation kicking into full gear, it’s doubtful this will continue. Nationwide, according to CNBC, people are losing ground. Wages are up 5% over last year, but in real terms they have declined by 1.2% when adjusted for inflation. And for people on the low-income end, all of this is bad news, indeed.
In October alone, the Labor Department said wages rose by 0.4%, but inflation was 0.9%. Administration officials and the Federal Reserve insist this inflation is temporary, pushed by supply chain and labor shortage issues. But, as the Wall Street Journal’s William A. Galston wrote this week, temporary is an inexact word. “The date things will return to normal keeps getting pushed back,” he said.
Prices, just like Utah’s daily COVID-19 positivity rate numbers, never seem to go down.
Galston suggests the Biden administration should begin viewing inflation as structural, not temporary. In Utah, people already view the price of housing that way, as they have for a long time.
On occasion, I have compared Utah’s housing market to San Francisco, which is generally regarded as the nation’s most expensive. Recent news reports say people are leaving the Bay Area as it becomes more acceptable to work from home. That may have slowed the rising cost of housing in San Francisco, but not by much. Zillow reports the median price there rose by 7.3% during the last year, to a median price of $1.52 million.
And yet, the Wasatch Front keeps catching up. In Salt Lake County, the increase during the past year was 28.2%, to a median of $541,027. In Metro Boise, the median price jumped by 45.3% to $501,580.
How much longer will these cities look like bargain alternatives for people leaving other markets, or have they already lost that edge? When does the cost of housing begin to hurt Utah’s economy?
The bigger question, of course, is what to do about all of this. The Utah Foundation suggests one solution could be an increase in so-called “middle housing.”
The website missingmiddlehousing.com describes this as consisting of structures with multiple units, anywhere from duplexes to stacked, low-rise triplexes, housed in buildings roughly the size of single-family homes, and located in walkable neighborhoods.
Another solution may be to build cheaper, 3-D printed houses, which I will discuss further in a future column.
Either way, any long-term solutions will require willing investors, developers and political officeholders with the courage to lead, not merely follow. That can be hard when future residents don’t have a vote, and current residents often don’t want change.
But the Utah Foundation also found that nearly 90% of Utahns worry about housing costs, particularly when it concerns young Utahns — the ones we should hope someday really will buy your home.
If they can’t afford to live here, the future is bleak, indeed.
That one is a bit harder to answer, although it ought to be occupying the minds of every state and local elected official.
That is especially true at a time when inflation can properly be described as rampant. Nationwide, it was at a 6.2% annual rate in October. In Utah, it was 7%.
Miles Hansen, President and CEO of World Trade Center Utah, recently told KSL that these higher prices are particularly being felt in Utah’s housing market, which shouldn’t come as much of a surprise.
The Utah Foundation report puts this in a useful perspective. From 2010 to 2021, the mortgage payment on a median-price home in Utah increased from $1,131 to $1,600, adjusted for inflation.
There is good news. On the other side of the ledger, Utah actually led the nation in income growth over those 11 years, at 3.4%. By one measure, this has more than kept pace with the money needed for a mortgage payment.
But with inflation kicking into full gear, it’s doubtful this will continue. Nationwide, according to CNBC, people are losing ground. Wages are up 5% over last year, but in real terms they have declined by 1.2% when adjusted for inflation. And for people on the low-income end, all of this is bad news, indeed.
In October alone, the Labor Department said wages rose by 0.4%, but inflation was 0.9%. Administration officials and the Federal Reserve insist this inflation is temporary, pushed by supply chain and labor shortage issues. But, as the Wall Street Journal’s William A. Galston wrote this week, temporary is an inexact word. “The date things will return to normal keeps getting pushed back,” he said.
Prices, just like Utah’s daily COVID-19 positivity rate numbers, never seem to go down.
Galston suggests the Biden administration should begin viewing inflation as structural, not temporary. In Utah, people already view the price of housing that way, as they have for a long time.
On occasion, I have compared Utah’s housing market to San Francisco, which is generally regarded as the nation’s most expensive. Recent news reports say people are leaving the Bay Area as it becomes more acceptable to work from home. That may have slowed the rising cost of housing in San Francisco, but not by much. Zillow reports the median price there rose by 7.3% during the last year, to a median price of $1.52 million.
And yet, the Wasatch Front keeps catching up. In Salt Lake County, the increase during the past year was 28.2%, to a median of $541,027. In Metro Boise, the median price jumped by 45.3% to $501,580.
How much longer will these cities look like bargain alternatives for people leaving other markets, or have they already lost that edge? When does the cost of housing begin to hurt Utah’s economy?
The bigger question, of course, is what to do about all of this. The Utah Foundation suggests one solution could be an increase in so-called “middle housing.”
The website missingmiddlehousing.com describes this as consisting of structures with multiple units, anywhere from duplexes to stacked, low-rise triplexes, housed in buildings roughly the size of single-family homes, and located in walkable neighborhoods.
Another solution may be to build cheaper, 3-D printed houses, which I will discuss further in a future column.
Either way, any long-term solutions will require willing investors, developers and political officeholders with the courage to lead, not merely follow. That can be hard when future residents don’t have a vote, and current residents often don’t want change.
But the Utah Foundation also found that nearly 90% of Utahns worry about housing costs, particularly when it concerns young Utahns — the ones we should hope someday really will buy your home.
If they can’t afford to live here, the future is bleak, indeed.
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