Utah Housing Market Update

               (Information from the meeting at the Legislature during Realtor Day)
   Utah's housing market is improving as more people buy homes. Utah home sales in 2011 were the highest they've been since 2007. Utah Realtors sold nearly 33,000 homes in 2011, up nearly 9 percent compared to 2010 sales. Home sales have been on the rise since June and are expected to continue the upward trend.
   Pending sales, which measure future home sales activity, were up 11 percent for 2011 compared to 2010. Jim Wood, of the University of Utah's Bureau of Economic and Business Research, forecasts home sales will rise 15 percent in Salt Lake County in 2012.
   The sales increases are the result of increased home-buyer confidence and improved employment conditions. The Utah Association of Realtors Housing Affordability Index was at its second-highest level on record in December while Fannie Mae reported that more consumers believe that home prices will rise within the next 12 months. Mortgage rates also remain at record lows, with Freddie Mac reporting that the average rate on a 30-year fixed mortgage in January was the lowest on records. Another positive influence on the housing market is the fact that Utah is in the top five states for employment growth.
   Together, these factors have pushed down housing supply. For the past 10 months, inventory declines have been in the double digits, with the number of active listings falling for more than a year. The number of homes on the market has not been this low since March 2007, and inventory is being absorbed at its quickest pace since July 2007. In December, it would have taken 7.2 months to sell all of the homes on the market, significantly lower than last year's 10.5 months.
   The tighter supply and increased demand should help put upward pressure on home prices. A report from Fiserv, with analysis from Moody's Analytics, says Utah home prices are set to rise 1.5 percent by the end of summer 2012 and more than 7 percent during the subsequent year.
We asked the Legislature to continue to support policies that will encourage this recovery, including actions that will promote the economy, job creation and housing affordability.