Housing affordability sees big gains in Utah metro areas
Utah real estate is seeing big affordability gains, according to a new report from the National Association of Home Builders and Wells Fargo. Numbers from the analysis show affordability in many Wasatch Front areas is back to levels seen in 2004, a time when Utah real estate was selling well and National City Corp. said Salt Lake had the most undervalued home prices.
The Housing Opportunity Index, which uses incomes, mortgage rates and home prices to determine affordability, is similar to a separate analysis conducted by Salt Lake City-based Wells Fargo economist Kelly Matthews. He says although average home prices are still higher today than in 2004, homes are about as affordable as they were five years ago because mortgage rates are closer to 5 percent rather than the near 6 percent rates in 2004.
Such is the case for the Provo-Orem area, which saw the biggest affordability gains in the state, according to the NAHB/Wells Fargo report. In the second quarter, 71.3 percent of the homes sold were considered affordable, only a tad off the 72.6 percent in 2004 and up significantly from the 48.5 percent last year.
Similarly, in Salt Lake, 70.6 percent of homes sold were considered affordable to those earning the area’s median income, close to the 75.2 percent in second quarter 2004 and up considerably from the 54.6 percent in 2008, according to the NAHB/Wells Fargo report. St. George had the lowest affordability in the state at 57.2 percent (up from 36.8 percent last year), and Ogden-Clearfield had the highest affordability at 81.5 percent (up from 68 percent last year).
“If someone feels secure in their employment and income and needs a larger home, in actuality it’s probably the best time to buy in a generation,” Matthews said.
Besim Kuduzovic "Yours Real Estate Samurai" - loyalty, devotion, integrity & honor to death
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