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Civility and Cooperation Moves Us Forward

In an era of divisive politics and polarized opinions, the value of civility and collaboration cannot be overstated. A shining example from American political history is the unlikely friendship and cooperation between President Ronald Reagan and Speaker of the House Tip O’Neill. Reagan, a stalwart conservative, and O’Neill, a dedicated liberal, sat on opposite ends of the political spectrum. Their policies and ideologies rarely aligned, and their spirited debates were legendary. Yet, despite their profound differences, both leaders understood the significance of working together for the sake of their nation. They recognized that a purely adversarial approach would hinder progress, stifling the nation’s ability to adapt and grow.

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One notable instance that exemplified their collaborative spirit was the 1983 Social Security amendments. Facing a looming crisis where the Social Security system was nearing insolvency, Reagan and O’Neill rose above partisan politics. They formed a bipartisan commission to address the issue, leading to significant reforms. These reforms included a gradual increase in the retirement age and changes to the taxation of benefits. Through their willingness to compromise, they safeguarded the Social Security system for future generations.

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“What both men deplored more than the other’s political philosophy was stalemate, and a country that was so polarized by ideology and party politics that it could not move forward,” said Thomas P. O’Neill, son of Tip O’Neill, in an opinion piece in The New York Times. “There were tough words and important disagreements over everything from taxation to Medicare and military spending. But there was yet a stronger commitment to getting things done.”

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obtaining housing because of race, color, religion, sex, handicap, familial status, or national origin.

The Salt Lake REALTOR is the monthly magazine of the Salt Lake Board of REALTORS . Opinions expressed by writers and persons quoted in articles are their own and do not necessarily reflect positions of the Salt Lake Board of REALTORS®

Permission will be granted in most cases, upon written request, to reprint or reproduce articles and photographs in this issue, provided proper credit is given to The Salt Lake REALTOR as well as to any writers and photographers whose names appear with the articles and photographs. While unsolicited original manuscripts and photographs related to the real estate profession are welcome, no payment is made for their use in the publication.

Views and opinions expressed in the editorial and advertising content of the The Salt Lake REALTOR are not necessarily endorsed by the Salt Lake Board of REALTORS . However, advertisers do make publication of this magazine possible, so consideration of products and services listed is greatly appreciated.

This human connection they cultivated paved the way for constructive dialogues, reminding them that beneath the political labels, they were both striving for a prosperous and united America. They shared meals, celebrated birthdays, and exchanged stories about their families, which only strengthened their bond.

In workplaces, teams often comprise individuals with varying perspectives, skills, and backgrounds. Instead of perceiving these differences as obstacles, they can be viewed as strengths. By fostering an environment of civility and collaboration, organizations can harness the collective intelligence and creativity of their workforce.

The respect and understanding exhibited by Reagan and O’Neill teach us that disagreements and differences need not be barriers to progress. When individuals approach each other with open minds and hearts, seeking to understand before being understood, they lay the groundwork for constructive dialogues and solutions. When we come together, the possibilities are endless.

Rob Ockey President

the NATIONAL ASSOCIATION OF REALTORS

The Salt Lake Board of REALTORS® is pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the nation. We encourage and support the affirmative advertising and marketing program in which there are no barriers to

Happenings In the News

Home Affordability Worsens for Wage Earners

ATTOM, a real estate data firm, recently released its third-quarter 2023 U.S. Home Affordability Report showing that medianpriced single-family homes and condos are less affordable in the third quarter of 2023 compared to historical averages in 99 percent of counties around the nation with enough data to analyze. The latest trend continues a two-year pattern of home ownership getting more and more difficult for average U.S. wage earners.

Realtor® Wins Ford Bronco

Lisa Radke (pictured seventh from left), a Realtor® with RE/MAX Results, was the winner of a 2023 Ford Bronco Sport. The prize was part of the annual Realtors® Political Action Committee (RPAC) membership dues giveaway. When members paid their annual dues and invested at least $15 toward RPAC, they were entered in the drawing. Lisa contributed $1,000 to RPAC. In 2022, members of the Salt Lake Board of Realtors® invested an average of $69.41 to RPAC, the highest per capita investment among mega associations across the country, according to the National Association of Realtors®. The San Antonio Board of Realtors® ranked No. 2 at $56.88 per member.

Pickleball for RPAC

The Salt Lake Board of Realtors® recently hosted a pickleball tournament for the Realtors® Political Action Committee (RPAC). Participants paid a $15 entry fee that went towards RPAC. More than 50 people took part in the activity. “We love to have events that enable our members to learn more about RPAC and the important role it plays,” said Lori Khodadad, chairwoman of the Government Affairs Committee. “Homeownership is still a fundamental cornerstone of the American Dream. It promotes stronger families, neighborhoods, and communities.”

The report shows that affordability has worsened across the nation amid a thirdquarter increase in home prices and homemortgage rates that has combined to help push the typical portion of average wages nationwide required for major homeownership expenses up to 35 percent.

The latest number is considered unaffordable by common lending standards, which call for a 28 percent debt-to-income ratio. It marks the highest level since 2007 and stands well above the 21 percent figure from early in 2021, right before home-mortgage rates began shooting up from historic lows.

Home ownership keeps getting tougher for buyers as average 30-year homemortgage rates in the U.S. have risen above 7 percent, from under 3 percent in 2021, and home prices have increased again in the third quarter of this year.

The nationwide median price of singlefamily homes and condos is up 2 percent from the second quarter, to a new record of $351,250. Typical values around the country have gone up for two straight quarters, from a fallback that lasted from the middle of 2022 into early 2023 and threatened to end the extended boom that has buoyed the U.S. housing market for 11 years running.

In Salt Lake County, the median singlefamily home price in the third quarter reached $605,000, up 1% from $600,000 in the third quarter of 2022. Sales of singlefamily homes fell 14% in the third quarter from the same period last year.

Those latest price and interest rate hikes, along with other forces, continue to push the typical cost of major ownership expenses up far faster than wages, resulting in declining home affordability.

Pictured (left to right): Eric Santistevan, Marcus Jessop, Matt Johnson, Kelsey Hancock, Lori Khodadad, Isabelle Reece, Kenadee Martinson, Karen Potter, Sophie Reece, and Tony Reece.

Home Buyers Face the Most Difficult Affordability Conditions in Nearly 40 Years

Among prospective home buyers, respondents say the main reason they have not yet bought a home is because they are waiting for prices to drop.

By The National Association of Realtors®

The current real estate market’s high home prices and mortgage rates, as well as limited inventory, are the top reasons that Realtors® and prospective home buyers across races and ethnicities cite as barriers to purchasing a home, according to two new reports from the National Association of Realtors®.

In partnership with Morning Consult, NAR’s 2023 Experiences & Barriers of Prospective Home Buyers Across Races/Ethnicities report surveyed White, Hispanic/Latino(a), Black and Asian prospective home buyers about their experiences. NAR’s 2023 Experiences & Barriers of Prospective Home Buyers: Member Study surveyed Realtors® who focus on residential real estate

regarding the latest buyer with whom they worked who has not yet purchased a home, and it compares findings with the consumer study.

“Home buyers face the most difficult affordability conditions in nearly 40 years due to limited inventory and rising mortgage interest rates,” said Jessica Lautz, NAR’s deputy chief economist and vice president of research. “The impact is exacerbated among first-time buyers who are more likely to be from underrepresented segments of the population.”

Among prospective home buyers, Asian (27%), Hispanic (24%), Black (20%) and White (15%) respondents say the main reason they have not yet bought a home is because they are waiting for prices to drop. White respondents (15%) are just as likely to say it is because

they are waiting for mortgage rates to drop. Additional market-related reasons that prospective home buyers cite as barriers include waiting for mortgage rates to decline (18% - 25% of all four groups) and not enough available homes within their budget (19% - 24% of all four groups).

The top three reasons why Realtors® say buyers have not yet purchased homes are the same as reported by consumers: not enough homes available for purchase in buyers’ budgets (34%), buyers are waiting for mortgage rates to drop as higher prices affect affordability (18%) and buyers are waiting for prices to drop (9%). These three factors greatly impact affordability since limited inventory drives up home prices and higher rates increase monthly mortgage payments.

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Saving for a competitive home down payment is also a primary obstacle for prospective home buyers (6% - 9% of all four groups). In terms of what holds them back from saving for a sufficient down payment, prospective home buyers across races and ethnicities cite as barriers current rent/mortgage payments (43% - 56% of all four groups) and credit card payments (38% - 57% of all four groups). Despite this, awareness about existing down payment assistance programs is low among prospective buyers saving for down payments. Only 8% - 15% of all four groups applied for these programs, 20% - 33% considered but did not apply to these programs, 21% - 32% did not consider these programs, and one-third (30% - 33% of all four groups) say that they are not aware of these assistance programs. For prospective home buyers who are aware of down payment assistance programs, the primary reason they did not apply for them is because they did not know enough about the programs (44% - 58% of all four groups). Likewise, more than half of Realtors® (53%) say that at least one issue is holding their latest buyer back from saving a competitive down payment: most likely current rent or mortgage payments (23%) or credit card balances or payments (17%). Further, only 23% of Realtors® say that their buyers experiencing these challenges have applied for down payment assistance programs. This is most likely because their income is too high (30%), they did not know enough about the programs (19%), or they are worried about the competitiveness of their offers in multiple-bid situations (17%).

“Down payment assistance programs often fly under the radar for potential home buyers. Using programs –

like FHA, VA or USDA loans – can make homeownership more attainable. Experts, such as agents who are Realtors®, can educate potential buyers about these programs. Doing so will bring in more first-time buyers and narrow the racial homeownership gap,” added Lautz.

Discrimination also plays a role in the homebuying process. About one in six (13% - 16% of all four groups) prospective home buyers across races and ethnicities report facing discrimination. More than half of Black (63%), Asian (60%) and Hispanic (52%) prospective home buyers who report this say it was due to their race or ethnicity. Of these, the largest proportions of every group are most likely to report that this discrimination manifests in steering toward or away from specific neighborhoods (36% - 51% of all four groups) and more strict requirements (32% - 48% of all four groups). Despite all of this, most discrimination during the homebuying process goes unreported: 47% - 81% who describe it did not report it to a government agency or legal aid organization.

Interestingly, only 1% of Realtors® who took the survey report that their buyers experienced discrimination during the homebuying process, while 13% are not sure. Those reporting discrimination are most likely to say this is based on race or ethnicity and lay this at the feet of lenders, saying that buyers experienced this in the type of loan product offered (43%) or that buyers did not receive a call back from lender(s) (29%). Of those who report discrimination, 57% report it based on race, 29% report it based on age and 21% report it based on familial status (including marriage or parental status). Just 7% say that the buyer reported the discrimination, which was based on either race or religion or both, to a government agency or legal aid organization.

To help address discriminatory practices in real estate, NAR offers several resources to its members, including Fairhaven, an interactive training simulation based on real fair housing cases; Bias Override, an implicit bias training course with practical tips to override bias; At Home With Diversity, a certification course aimed at serving diverse consumers; and a confidential voluntary self-testing program for brokerages to assess agents’ compliance with fair housing laws. In Washington, NAR advocates for strong fair housing and fair lending enforcement, and policies aimed at closing homeownership gaps among demographic groups.

About the National Association of Realtors®

The National Association of Realtors® is America’s largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries. The term Realtor® is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of Realtors® and subscribes to its strict Code of Ethics.

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Realtors® Tackle Supply and Affordability Challenges for Would-Be Home Buyers

Local governments have created a system of complicated rules and processes that limit development, especially in highly desirable locations.

By Alexia Smokler, Brennon Thompson, Colette Massengale National Association of Realtors®

You live with the challenges every day: Low inventory, high prices, and, more recently, rising interest rates have dramatically cut into buyers’ spending power. Soaring rents and other factors make it difficult for many people to save or qualify for their first home. Meanwhile, local regulations, combined with material and labor shortages, are suppressing the production of new homes.

Estimates of the housing supply shortage range from 4 million to 6 million units nationwide.

As a result of all these factors, housing affordability has reached historic lows. As of April 2023, only 23% of listings were affordable to households earning the

median income of $75,000 or lower. Compounding the challenge, America’s decades-old housing finance system doesn’t meet the needs of many creditworthy borrowers.

On the Front Lines

The political and practical complexity of housing production has made it a low political priority for years, but skyrocketing housing prices have finally captured the attention of lawmakers at the state and local levels.

“There’s a lot of energy around state-level housing policy at the moment, which is very exciting to see,” said Jenny Schuetz, senior fellow at Brookings Metro.

She points to Oregon’s legalization of “missing middle” housing statewide a few years ago, Massachusetts’ new law to create more apartments near transit stations, and efforts by Montana and Utah to make it easier to build “abundant, diverse housing to accommodate the increased demand created by work-from-home.”

Mike Kingsella, CEO of Up for Growth, a national network committed to solving the housing shortage through evidence-based research and policy, agrees. “A body of policy is emerging in cities and states nationwide, and we believe that the best approaches combine sticks, carrots and new resources,” he said. “All of these offer slightly different models, both in policy design and political framing.”

Realtors®, members of the National Association of Realtors®, are crucial players in the policy arena. That’s because no one is more attuned to the challenges facing buyers and sellers locally. To identify and confront barriers in their market, many state and local Realtor® associations have found success with the help of community outreach and issues mobilization funding from the National Association of Realtors®.

In Blount County, Tenn., a zoning proposal before the County Council would have placed severe new restrictions on housing development, increasing minimum lot sizes and eliminating planned unit and cluster development. The Knoxville Area Association of Realtors® organized to defeat the proposal, mobilizing members to fill the hearing room on the day of the vote with dozens of people wearing Realtor® blue.

“Overly restrictive zoning regulations are perhaps the single largest barrier to affordable housing both in East Tennessee and throughout the United States,” said Hancen Sale, government affairs and policy director with the Knoxville association. “Since most zoning decisions occur at the county and municipal level, local Realtor® associations are on the front lines of this debate, and we have the opportunity to vocally champion the cause of housing affordability.”

With a housing shortage larger than the national average, the Spokane Association of Realtors® leveraged an NAR grant to fund a study by the Counselors of Real Estate, an NAR affiliate. The result: an 89-page report with a road map of proven solutions for the city of Spokane, addressing everything from infill development to leadership and staffing of the municipal planning department.

The association worked with the city on adoption of a pilot zoning change that would allow duplexes and townhouses in all residential neighborhoods, plus triplexes and fourplexes near commercial zones and transit lines. The city’s planning director said the initiative aims to increase density while matching the look and feel of a neighborhood. “The Counselors’ report gave us instant credibility and helped us offer answers,” said Tom Clark, 2020 president of Spokane Realtors®.

The U.S. Department of Housing & Urban Development released in April a set of best practices for communities grappling with housing shortages. HUD is now accepting requests for technical assistance to help local governments ensure housing needs are considered as part of their larger infrastructure investment plans.

A Housing Finance System for All

While Realtors® continue to advocate for increased housing supply, improvements in the housing finance system are also needed to help more creditworthy Americans attain homeownership. Buyers who lack generational wealth, who are not W-2 wage earners, or who have “thin” credit files or medical or student loan debt may fail to qualify for mortgages even though they reliably pay the rent.

NAR has long advocated for updated credit scoring models designed to responsibly expand mortgage credit for millions of Americans. And late in 2022, Fannie Mae and Freddie Mac announced they would implement newer credit scoring models that account for data such as positive rental payment history and

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utility payments. Research by the Urban Institute has found that a significant share of Black and Hispanic households whose mortgage applications were denied in 2020 could have been approved if 12 months of positive rental payments were included in the underwriting.

“FHFA’s adoption of FICO 10T and Vantage 4.0 is a major step toward a more inclusive mortgage market,” said Vanessa Gail Perry, professor of marketing, strategic management and public policy at the George Washington University School of Business. “This will benefit the almost 30% of households with sparse or missing credit histories, thereby removing a major barrier to access to the mortgage market, particularly for Black and Brown consumers.”

Redressing Discrimination and Income Hurdles

With Realtor® support, some states are taking their own actions to encourage homeownership among groups that have been excluded in the past.

Recently, the Washington Realtors® Association successfully lobbied for a state law that will provide down payment and closing cost assistance to “those who were prohibited from owning a home in Washington because of racially restrictive covenants, or their descendants.”

The program will be funded by adding $100 to the document recording fee assessed on real estate transactions. In an op-ed in the Washington News Tribune, 2023 President Alisha Harrison wrote, “Those who were barred from homeownership didn’t just suffer personally; their children and grandchildren

continue to pay the price.” Noting that the biggest predictor of homeownership is whether one’s parents were homeowners, Harrison continued, “As a mechanism, creating a new homeownership account for descendants of those who were denied housing opportunities is simple; as a solution, its effects will be profound.”

Whatever their background, far too many households find the barriers to entry too high. The 2023 president of the Mid-Shore Board of Realtors® in Maryland, Megan Rosendale, wanted to help local tradespeople and service providers afford to live close to where they work. “All too often, we see electricians, servers and nurses commute long distances, even from Delaware, to work in our local counties” due to affordability challenges, noted Rosendale.

MSBR created the Love Down Payment Grant program for people working in five neighboring counties who want to buy near where they work. Said Rosendale, “What better way to be vested in the local community than if they are living and working in the same place?”

The Erosion of Affordability

NAR’s Housing Affordability Index measures whether a typical family earns enough to qualify for a mortgage loan on a typical home. An index score of 100 means that a buyer with the median income (using data from the Census Bureau American Community Survey) can qualify for the median home. Data going back to 1980 shows how affordability, particularly for first-time buyers, has eroded, diving in 2022 to a level not seen since the mid-1980s.

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NAR Celebrates 2023 Good Neighbor Awards Finalists

Five winners will each receive a $10,000 grant and national media exposure for their charity.

By The National Association of Realtors®

The National Association of Realtors® recently announced the 10 finalists for its 2023 Good Neighbor Awards, which honor NAR members who make an extraordinary difference in their communities through volunteer work. Now in its 24th year, the Good Neighbor Awards recognize volunteers who donate time, money and passion to enrich the lives of people in their communities.

“Each year, the Good Neighbor Awards serve as a poignant reminder of the heart and soul of our real

estate community,” said NAR President Tracy Kasper. “It’s not just about buying or selling properties; it’s about investing in the places we call home. These finalists exemplify the essence of what it means to be a good neighbor, turning their passion and dedication into realworld change.”

Five winners will each receive a $10,000 grant and national media exposure for their charity, including a feature in the fall issue of Realtor® Magazine. The winners will also be honored in November during NAR

NXT, The Realtor® Experience, in Anaheim, California. Five honorable mentions will receive $2,500 grants. In September, the public voted for their favorite Good Neighbor finalists. The top three vote-getters will be recognized as Web Choice Favorites, the winner will take home $2,500, and the second- and third-place finishers will each receive $1,250, funded by Realtor. com®.

The 10 NAR Good Neighbor Awards finalists are as follows:

Debbie Arakaki, Compass, Lahaina, Hawaii

In the state with the nation’s highest food costs, Debbie Arakaki has raised funds to provide more than one million meals through the Maui Food Bank. Since 2015, Arakaki has rallied the real estate community to host food drives, run fundraisers and volunteer for foodpacking events. Now, in the aftermath of the Maui wildfires, she is amping up her efforts to help thousands of families who lost their homes. She and a group of other long-time Maui residents created the Maui Pono Foundation to provide immediate funds to neighbors in need.

Betsy Brint, @properties, Highland Park, Illinois

A 10-year volunteer with the Highland Park Community Foundation, Betsy Brint led the response after a mass shooting occurred at the 2022 Independence Day Parade in her hometown. She oversaw the distribution of $5.8 million to the families of the deceased, injured victims and nonprofit organizations that provide mental health, legal and other services to community members affected by the shooting.

Karen DeMarco, Coldwell Banker Residential Realty, Tenafly, New Jersey

Karen DeMarco was inspired by her community’s support during her battle with breast cancer and decided to pay it forward. Within three years, DeMarco went from cooking meals in her kitchen to co-founding The Food Brigade, a food pantry network that has provided more than 1,700 tons of food to tens of thousands of people in three New Jersey counties.

Rick Furnish, Landmark Realty & Development Co., Spearfish, South Dakota

A foster parent and adoptive parent, Rick Furnish brought America’s Kids Belong to South Dakota and created a collaborative relationship between the state, faith community, local businesses and the arts community to improve outcomes for kids in the foster care

system. He launched “I Belong” videos, which have given nearly 150 kids a voice as they wait to be adopted. Furnish has also spent 20 years volunteering with Hope Ranch International.

Kasia Maslanka, Douglas Elliman, Fort Lauderdale, Florida

Kasia Maslanka co-founded Morningday Community

Solutions to redirect overstocked or returned excess merchandise from retail businesses to nonprofits and people who need it. Over 13 years, they’ve saved nonprofits $9 million in spending and have diverted over 400 tons of unused products from landfills each year.

Jed Nilson, Nilson Homes, Ogden, Utah

Jed Nilson has built 15 homes through the Northern Wasatch Association of Realtors®’ Have a Heart Foundation, which sells the homes to families in need at a deep discount. His company, subcontractors and suppliers have donated millions of dollars in labor and supplies to make these dream homes a reality. Nilson is also building a resource center for the nonprofit Encircle to support LGBTQ+ youth and families.

Irene Sawyer, Keller Williams High Country, Boone, North Carolina

A breast cancer survivor, Irene Sawyer founded the High Country Breast Cancer Foundation, which eases the burden of medical bills for cancer patients. The nonprofit funds wigs, mastectomy bras, breast prostheses and other cancer-related garments. They also contribute to the college funds of surviving children and have brought a mammogram bus to the area for the first time.

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Sandra Shank, Tag Ventures Real Estate Services Co., Palm Coast, Florida

In 2003, Sandra Shank opened Abundant Life Ministries–Hope House Inc. to give troubled teenage boys in Florida’s foster care system a supportive foundation. For 20 years, she has housed and mentored 300 of the most vulnerable boys and now plans to break ground on an affordable housing project to provide holistic care for troubled families.

Steven Sharpe, Keller Williams Realty, Chattanooga, Tennessee

Steven Sharpe co-founded Camp Horizon with his wife, Lindsey, to offer a summer camp experience to kids who have physical disabilities like paralysis, spina bifida or cerebral palsy. Since 2005, the camp has engaged more than 500 kids in accessible activities such as canoeing, horseback riding and fishing. To ensure the children’s happiness and safety, the camp has more than 50 volunteer counselors, many with medical training.

Anita and Jay Sherley, Big Sky Brokers LLC, Helena, Montana

Anita and Jay Sherley provide stable housing and mentoring to at-risk young men and women, many of whom are homeless, recently released from jail or too old for foster care. In the 16 years since they founded Life Houses Inc., the Sherleys have helped more than 200 at-risk young adults build life skills to transition to productive, goal-oriented lives of purpose.

NAR’s Good Neighbor Awards are supported by primary sponsor Realtor.com® as well as the Center for Realtor® Development.

“We continue to be inspired by the positive change the Good Neighbor Award finalists are making in their communities across the country,” said Realtor.com® CMO Mickey Neuberger. “They serve as role models not just for their fellow real estate agents, but for everyone else who comes in contact with them. Realtor.com® is once again proud to recognize the differences they’re making.” Nominees were judged on their personal contribution of time as well as financial and material contributions to benefit their cause.

Realtor.com® is an open real estate marketplace built for everyone. Realtor.com® pioneered the world of digital real estate more than 25 years ago. Today, through its website and mobile apps, Realtor.com® is a trusted guide for consumers, empowering more people to find their way home by breaking down barriers, helping them make the right connections, and creating confidence through expert insights and guidance. For professionals, Realtor.com® is a trusted partner for business growth, offering consumer connections and branding solutions that help them succeed in today’s on-demand world. Realtor.com® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more information, visit Realtor.com.

The Center for Realtor® Development (CRD), a wholly owned subsidiary of NAR, is devoted to lifelong learning, career advancement, and specialized credentials for real estate professionals. With 10+ designations and certifications, over 100 microcourses, learning pathways, an award-winning podcast, and educational events, there is a learning experience for every real estate professional. Learn more at crd.realtor. The National Association of Realtors® is America’s largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries. The term Realtor® is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of Realtors® and subscribes to its strict Code of Ethics.

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State of the State’s Housing Market, 2022-2024

The income required to finance a mortgage payment for a median price home in Utah in 2023 was $150,000, up 2.8% from a year ago and 52.1% from two years ago.

By James Wood Ivory-Boyer Senior Fellow Kem C. Gardner Policy Institute

Dejan Eskic Senior Research Fellow and Scholar Kem C. Gardner Policy Institute

The 2022-2024 edition of the Kem C. Gardner Institute’s State of the State’s Housing Market provides a detailed analysis of current housing market conditions in Utah. The report provides information on five areas: (1) residential construction activity, (2) existing homes sales, (3) the housing shortage, (4) prices and affordability, and (5) a 2023 and 2024 forecast. Each section provides a statistical time series presented in tables and figures as well as an analysis of past trends and current conditions.

Homebuilding Whiplashed by Interest Rates

The historic expansion and contraction of the housing market in 2021 and 2022 reflects the Federal Reserve’s response to the COVID-19 pandemic. As the pandemic emerged, the Federal Reserve drove down interest rates to record low levels to avert a depression. The low interest rates ultimately led to higher inflation rates by 2022, which the Federal Reserve sought to counter with a historically rapid increase in interest rates. Consequently, mortgage

rates doubled in less than a year. Predictably, Utah’s housing market felt the full force of the Federal Reserve’s policy, both on the upside and the downside. The policy affected all types of residential construction. Year over comparisons show single-family residential construction was hardest hit with a 32% drop in building permits in 2022, followed by a 27% decline in apartment unit permits, and a 9.5% decline in condominium, town home, and twin home permits.

The weakened market conditions continued into 2023. Building permit data from the U.S. Census Bureau show Utah’s year-over January to June residential permits for all types of units fell 37.2%. Only four states, Montana, New York, Wyoming, and Alaska have had sharper declines. Nationally, permits for all types of units fell 17% over the January-June period. Single-family permits dropped 41% in Utah compared to 21% nationally.

The rise in mortgage rates gave additional momentum to the shift from low density housing (single-family) to high density housing (condominiums and apartments). More high-density housing has been developed in Utah since 2021 than at any other time; 15,000 condominium units and 24,500 apartment units received building permits in the past two years. Sixty percent of all residential permits issued in 2022 were for apartments, condominiums, town homes, and twin homes, the highest share on record.

Residential Construction Concentrated in Five Cities

A handful of Utah cities accounted for a significant share of residential construction activity in 2022. The top five cities statewide are ranked by number of new units by type (single-family, condominium, townhome, twin home, and apartments). St. George led all cities in permits issued for single-family with 834 units. Washington City ranked 4th with 581 new homes. The other three cities are all located in northern Utah County in the Silicon Slopes area: Eagle Mountain (724 units), Saratoga Springs (583 units), and Lehi (500 units). Building activity in these top five ranked cities represent 27% of single-family permits issued statewide.

Lehi was the dominant city in condominium development in 2022. The city issued permits for 914 units, roughly one out of every eight new condominiums units statewide. Salt Lake City ranked 2nd with 540 units. Two of the three remaining top five cities, Saratoga Springs and Eagle Mountain, are in northern Utah County. The fifth city, South Jordan (309 units), is nearby in Salt Lake County. The top five cities represented 36.5% of all new condominium units statewide in 2022.

Twenty percent of all new apartment units in 2022 were in Salt Lake City and the apartment boom in downtown Salt Lake City continues unabated by the pandemic. The city issued permits for 2,679 apartment units in 2022.

The top five cities for apartment development in 2022 accounted for nearly half of all new apartment units statewide. Apartment development is not as sensitive to higher interest rates as single-family and condominium development due to the two-to-three-year lead time for approvals and financing. Consequently, projects that are underway with approvals and financing in strong economic periods may draw building permits during times of weak market conditions.

Existing Homes Sales Fall to Lowest Level in Eight Years Utah Realtors® did not fare much better than homebuilders in 2022. Existing home sales dropped by 19.4% in 2022, well below the 26% decline in homebuilding. Statewide residential real estate sales totaled 40,686 units in 2022, the lowest level in eight years. Single-family sales fell to 29,804 homes, a decline of 19.3% while condominium, townhomes and twin homes had a nearly identical decline of 19.5%, a total of 10,266 homes. As a percentage of total sales, multifamily units (condominiums, townhomes, and twin homes) have steadily increased their share of sales. In 2000, multifamily sales accounted for 14% of total sales. By 2022 their share had increased to 25%.

Residential sales fell in every Wasatch Front county in 2022. Salt Lake County had the steepest decline at 25.4%, while sales in the other three counties declined about 15%. The declines have continued for each county over the first six months of 2023 with Salt Lake County reporting the largest decline of 24.6%. Statewide sales are down 20.6% through June 2023.

Real Estate Commissions Total $1.5 Billion

Although sales fell in 2022, the value of residential sales was the second highest ever at $25 billion, down only 10% from 2021. The value of residential sales held up better than the number of sales due to the increase in home prices. Consequently, residential real estate brokers and agents did remarkably well, not only in 2022, but over the last several years. The near doubling of housing prices since 2017 raised total commissions by a similar amount in 2022 (increasing from $891 million to $1.5 billion), the second highest year ever. That said, the booming real estate market and growth in commissions attracted more agents to the profession and, consequently, total commissions are divided among a growing number of agents. The sales business has become more competitive for the individual agent as the number of licensed Realtors® in Utah grew from about 15,000 agents in 2017 to an all-time high of 20,000 in 2022.

Median Days on Market Declines in 2023

An important indicator of real estate market conditions is the median days on market (MDOM). This metric measures the number of days from the listing of a home to a signed purchase contract, i.e., the number of days a home is unsold. The historic MDOM average from 2000 to 2022 is 45 days. During the Great Recession (2008-2011), when housing demand was devastated by the financial crisis,

the MDOM increased to a high of 87 days and averaged 81 days. This is in sharp contrast to the era of low interest rates which begin in 2014. Low rates spurred housing demand by effectively making housing more affordable. For five years (2016-2020) the days on market averaged around 20 days but fell to a low of seven days by 2021 as the Federal Reserve’s interest rate policy resulted in mortgage rates dropping below 3%. As the Federal Reserve began their interest rate hikes in spring 2022 the days on market moved in short order to 20 days by July. From July to January the indicator rose to 52 days, the highest level since the Great Recession. But since then, it has fallen to 24 days by July indicating that demand may be recovering despite relatively high mortgage rates.

Residential Real Estate Listings Impacted by Interest Rate Volatility

Low interest rates produced a strong demand for housing from 2020 to early 2022, which in turn drove down the number of active listings. Homes for sale quickly cleared the market, depleting the number of active listings. By Q1 2022, statewide active listings fell to 2,000 homes. The number of listings in the first quarter is typically well over 6,000 homes.

Once interest rates began to rise in Q2 2022, the number of active listings also rose as homes took longer to sell and new listings from prospective sellers added to the number of listings. The increase, however, was shortlived. By Q1 2023, the number of active listings peaked as sellers pulled back resulting in fewer new listings. Many homeowners became reluctant sellers, scared off by steep prices and the high mortgage rates they would face as buyers. Consequently, the number of active listings fell for six consecutive months, falling from 10,221 in October to 6,528 in April 2023. With the spring housing market, the prime time for selling a home, active listings have increased in the past three months.

Although active listings have increased, the number of listings entered (new listings) is well below the levels of the last four years. The number of entered listings in July (20192022) averaged 6,000 listings compared to only 4,335 in July 2023. Due to the years of mortgage rates below 4% (2019 to spring 2022), many homeowners now have mortgages carrying interest rates below 4%. At the end of 2022, 62% of mortgage holders nationally had a mortgage rate below 4% (according to Redfin News). Many of these low mortgage rate homeowners have become unwilling sellers in a period of high rates, thus reducing the number of entered listings. The effect of years of low interest rates and the subsequent rapid rise in 2022- 2023 is now limiting the supply of new listings with implications for Utah’s housing shortage and housing affordability.

Homebuilding Contraction Likely to Increase Utah’s Housing Shortage

A commonly used measure for a housing shortage compares increases in households against increases in housing units. This measure assumes that an additional household requires an additional housing unit. This

assumption is consistent with the U.S. Census Bureau’s methodology, which reports occupied housing units and households as equal and interchangeable estimates.

A housing shortage occurs when growth in households exceeds growth in housing units, historically an uncommon condition in Utah. A review of changes in households and housing units shows that from the 1970s through the 2000s, the decadal growth in housing units exceeded growth in households by nearly 15%. The surplus is, in part, explained by the addition of units that are not occupied by a full-time resident (household), such as second homes, recreational condominiums (timeshare units), and cabins.

From 2010 to 2017, however, the housing-units-tohouseholds relationship flipped, with additional households outnumbering additional housing units, thus creating Utah’s first prolonged housing shortage. Each year, from 2010 to 2017, the growth in households was greater than the growth in housing units, although the gap gradually declined over the seven-year period. The cumulative shortage from 2010 to 2022 totaled 28,415 housing units. This should not be interpreted as leading to 28,415 homeless households. Rather, the shortage created record low rental vacancy rates in both rental units and owner-occupied units. In other words, the shortage removed vacant units from the housing market, and created an unhealthy condition leading to higher housing prices, higher rental rates, and few housing alternatives especially for moderate to low-income households.

By 2018, the housing shortage began to ease as the building boom finally caught up with household growth and new housing units exceeded the number of new households. In that year, new housing units totaled 24,245 while households increased by 23,139, thus reducing the housing shortage by about 1,100 units. Over the next four years more housing units were built than new households created, shrinking the housing shortage to a little more than 28,000 units.

But the rapid rise in mortgage rates threatens to undo some of this recent progress. Although new housing units did exceed new households in 2022, residential construction projections indicate the five-year decline in the shortage may soon end. Household growth is expected to exceed housing unit growth in 2023 and 2024 by about 8,800 units. This shortfall would push the housing shortage up by 31% to 37,255 units.

Market Conditions and the Housing Shortage

Another measure of a housing shortage looks at conditions “on the ground.” The housing market has three entry points: buying a new home, buying an existing home, or renting a unit. For the past several years these points of entry have shown the stress of demand outstripping supply, however, in 2022 these indicators told a mixed story. The rental market showed demand outpacing supply as rental vacancy rates in the Wasatch Front counties were around 4%. An acute shortage of affordable rental housing—rental units

affordable to households with incomes equal to or less than 50% area median income (AMI)— persisted with tax credit, public housing, and housing voucher programs all carrying long waitlists.

The story is mixed because of the historically rapid increase in mortgage rates, which doubled in less than 12 months and created a sudden and unexpected shock to the housing market. The psychological and financial impact on homebuyers cut into the demand for both new and existing homes. Consequently, these two points of entry, new home or existing home purchase, as indicators of a housing shortage, at least in the shortterm, have been rendered less meaningful. To be brief, does the 26% decline in new housing units and the 19% decline in the sales of existing homes signal a significant shrinkage of the housing shortage? Or what does the rise of MDOM from six days in March 2022 to 45 days in December 2022 tell us about the housing shortage? The interest rate increases of 2022 interrupted and created short-term (hopefully) distortions of demand for new and existing homes. Perhaps, it is best not to interpret the impact of short-term wild swings in demand as indicators of long-term housing market conditions, particularly in the case of the housing shortage.

Occupied Housing Units as a Measure of the Housing Shortage

A third method for measuring housing shortages comes from the U.S. Census Bureau, which provides estimates of total and occupied housing units. The bulk of vacant units is composed of second and recreational homes followed by vacant rental units and finally vacant “for sale” homes. The estimates from four decennial censuses for Utah show that on average 90.6% of all housing units are occupied units. The U.S. Census Bureau’s 2021 American Community Survey for Utah shows that 92.6% of all housing units are occupied. The number of vacant units in 2021 is the smallest of the five-time periods selected. Fewer vacant units and more occupied units suggest that the market is experiencing a housing shortage. If we apply the average of 90.6% from the decennial censuses to the total occupied units in 2021 of 1,1,90,154 units, the number of vacant units would increase by 23,220 and the number of occupied units would decline by a like number, easing the housing shortage. The third measure using occupied housing units indicates Utah faced a housing shortage of at least 23,000 units in 2021.

The Pandemic’s Impact on Housing Market Conditions

The COVID-19 pandemic had a profound impact on Utah’s housing market. Like the Great Recession, the pandemic

was a unique moment in Utah’s housing history. The Great Recession featured the most prolonged period of price declines—16 consecutive quarters—while the pandemic triggered the steepest rise in prices in Utah’s real estate history. In a matter of 24 months the median sales price of a home increased by 51%; (from $335,000 Q1 2020 to $505,000 Q1 2022).

What caused the historic rise in prices? Certainly, the Federal Reserve’s low interest rate policy served to stimulate demand but there were other factors at play. The pandemic brought large scale investors, flush with cash, into the housing market, which added to demand. In some urban markets investors accounted for 20% of homes purchases in 2021. The rise of remote work due to the pandemic gave a boost to net inmigration, which also added to housing demand. Net inmigration grew from 26,142 to 38,191 from 2020 to 2022. While not all these individuals were remote workers, a common real estate anecdote during this period recounted the arrival of outof-state remote workers and their willingness and ability to pay top dollars for Utah real estate.

Unfortunately, this heightened demand struck when Utah was facing a housing shortage of 44,000 units—a shortage equivalent to about 18 months of homebuilding. And of course, the shortage was made worse by construction delays from the pandemic’s disruption of the construction supply chain. And finally, a non-pandemic related supply constraint was the rise of short-term rentals. From 2019 to 2021 the number of shortterm rental homes in Utah increased by 27% to 18,743 homes thus reducing the supply of long-term housing.

The Pandemic’s Impact on Housing Prices

With the squeeze on supply and the surge in demand, an accelerated increase in housing prices was inevitable. Given the magnitude of the increase, 53% in twentyfour months (Q2 2020 to Q2022), a correction was also inevitable. According to the Federal Housing Finance Agency’s price index, housing prices went from a yearover quarterly increase of 29.7%, to a decline of 4.3% in 18 months, exhibiting much greater volatility than prices nationally. The interest rate induced price swings highlight the volatility of housing prices in Utah. In the four price cycles since 1992, the rate of change of Utah housing prices have been higher on the upside and lower on the downside.

The Federal Housing Finance Agency (FHFA) publishes quarterly housing price data for each state and the largest one hundred metropolitan areas. The FHFA’s Housing Price Index (HPI) is an important source of comparative price

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data for states and metropolitan areas. “The house price indexes measure changes in single-family home values based on data from all fifty states and over 400 cities that extend back to the mid-1970s. The HPI is a weighted, repeat-sales index, meaning it measures average price changes in repeat sales or refinancings on the same properties. This information comes from reviewing repeat mortgage transactions on single-family properties whose mortgages have been purchased or securitized by Fannie Mae or Freddie Mac since 1975.”

FHFA ranked Utah 50th or last in the percent change in housing prices in Q1 2023. Utah’s 4.3% decline was the largest among the seven states experiencing declines, all of them western states. While prices fell in most western states the rest of the country experienced price gains. Twenty-eight states had increases of at least 5%. South Carolina led all states with a year-over increase of 9.5%. The fiscal and monetary response to the pandemic brought a necessary but short-term price correction to Utah’s housing market. Despite the past 12-month decline Utah still ranks second in the long-term increase in housing prices. From 1991 to Q1 2023 Utah’s housing price index increased by 564.7%, second only to Colorado’s 565.04% increase. And in the Salt Lake City Metropolitan Area, the long-term increase has been even greater than the statewide increase. Of the largest 100 metropolitan areas, the Salt Lake City Metropolitan Area ranks first with an increase of 628.2% from1991 to Q1 2023. The year-over first quarter index shows a 4.9% decline in prices in the Salt Lake City Metropolitan Area, which ranks 90th among the one hundred metropolitan areas. San Francisco had the largest decline of the 100-metropolitan area, 10.1%, followed by Austin, Texas at 8.5%.

The FHFA index tracks price changes but not the absolute price of a home. The National Association of Realtors® (NAR), however, publishes quarterly data on the median sales price of a single-family home in 185 metropolitan areas. The four Utah metropolitan areas included in the report all show declines in home prices in the first quarter. Both St. George and Provo-Orem had double-digit declines, nevertheless the price of a median priced home in both metropolitan areas is relatively high. Out of 185 metropolitan areas, St. George, with a median price of $512,000, ranks 29th highest and Provo-Orem ranks 32nd. The Salt Lake City Metropolitan Area ranks 27th in housing prices; only 15% of the 185 metropolitan areas surveyed have higher median sales prices.

Housing Price Change for Utah’s Counties and Large Cities, 2022-2023

The National Association of Realtors’ price data relies on information from the multiple listing services (MLS) in each state. Locally, UtahRealEstate.com provides (MLS) price data on real estate listings and sales transactions. The yearover second quarter price data show that county-level prices varied across Utah.

Sales transactions include all types of housing (singlefamily, condominium, townhome, and twin home).

The median sales price in counties with more than 50 transactions increased in only four counties and declined in 10. Rural counties with a smaller number of sales transactions are more likely to report a price increase. Price increases were strong in Summit and Wasatch counties, the two most expensive housing markets in the state. The median sales price in Summit increased by 7.0% to $1,375,000 and in Wasatch County by 4.8% to $1,016,143. Ten counties experienced year-over price declines in Q2 2023. Five counties reported double-digit declines. Washington County, for example, saw a 12.8% decline in the median sales price. The four Wasatch Front counties also saw declines, with the largest in Utah County (-10.6%) and the smallest in Davis County (-3.7%). Statewide the median sales price declined 7.7% in the second quarter, falling from $535,000 in 2022 to $493,990 in 2023. Nearly all Utah’s largest cities had year-over second quarter price declines as well. Five cities had double-digit declines, led by Eagle Mountain, where prices fell 13.7%. Only two of Utah’s largest cities saw increases: Herriman and Draper. The median sales price in Herriman increased by 0.5% to $571,956. South Jordan saw a larger gain of 7.5%, with the median sales price increasing to $785,000.

The Inverse Relationship of Housing Prices and Interest Rates

The sharpest price decline in Utah’s real estate history occurred from May 2022 to January 2023. In just eight months the median sales price of an existing home statewide fell 16%. Statewide the median sales prices peaked in May 2022 at $545,000. By January 2023, it had fallen to $460,000. There is no other comparable shortterm decline, when housing prices fell so far so fast, in either the Great Recession or the decade of the 1980s. The trough of this price cycle was likely established in January 2023 with the statewide median price of $460,000. From January to May 2023 the median sales price increased each month, reaching $499,000, however, in June and July the price stalled at nearly $500,000. Nevertheless, the recovery in prices so far in 2023 is encouraging, indicating that the downward pressure on prices is winding down. Furthermore, the monthly yearover price decline decelerated over the last three months, narrowing to a 2% decline in July 2023 compared to July 2022. Thus, the month-to-month and year over data, along with the declining days on market suggest that price declines may have hit bottom in spring 2023.

It is no coincidence that the historic decline coincided with the most rapid short-term increase in mortgage rates ever. From March 2022 to January 2023 the average 30year mortgage rate rose from 3.76% to 6.48%. The rise in the mortgage rate was due indirectly to the Federal Reserve’s increase in the federal funds rate. The Federal Reserve raised the federal funds rate eleven times from March 2022 to July 2023 to slow economic growth and cool inflation. In a little more than a year the Federal Reserve has increased the federal funds rate from zero in Q1 2022 to 5.5% in July 2023.

Measuring Housing Affordability: Median Multiple and Housing Opportunity Index

One measure of housing affordability is the median multiple, which is a price-to-income ratio of the median house price divided by the median household income. From 2000 to 2018 the median multiple in Utah was under 4.0. Housing was moderately unaffordable. But by 2019 and 2020 the ratio moved up to the 4.1 to 5.0 range, a seriously unaffordable rating. By 2021 and 2022, the acceleration in price increases pushed the median multiple to 5.61 in 2021 and 6.26 by 2022, signifying a severely unaffordable housing market.

The Salt Lake City Metropolitan Area has a median multiple of 6.6, comparable to Portland, Las Vegas, Seattle, and Denver.

Another measure of affordability is the quarterly Housing Opportunity Index (HOI) published by the National Home Builders Association and Wells Fargo. The HOI is “the share of homes sold (existing and new) in a metropolitan area that would have been affordable to a family earning the local median income.” The HOI is like the median multiple in that it has two major components: income and housing prices. The HOI, however, estimates the share of homes affordable to the median income family, rather than a ratio of the median multiple. The HOI of the four metropolitan areas in Utah show declining affordability throughout 2022 and into 2023 (Table 18). Over six quarters the HOI for Salt Lake City Metropolitan Area fell from 44.3 in Q1 2022 (meaning the median income family could afford 44.3% of homes sold in that quarter) to 21.9 in Q2 2023. In an affordable housing market, the median income family should be able to afford at least 50% of the homes sold. Neither of these affordability measures, however, considers the housing wealth of the median income family. Most homeowners have benefitted from the rise in housing prices. Their equity gains offsetting the deterioration in affordability. Hence, the median multiple and HOI are mechanistic in that they only consider income and housing price. Nevertheless, they are meaningful indicators of the deterioration of housing affordability and of particular relevance to households not yet homeowners.

Mortgage Payments Increase Despite Drop in Housing Prices

The monthly mortgage payment on the median priced home in 2021 was $2,466 and the income required to finance the mortgage was $98,640. The mortgage payment increased to $3,648 in 2022 and to $3,750 in 2023. The income required to finance the mortgage payment in 2023 was $150,000, up 2.8% from a year ago and 52.1% from two years ago. This sharp two-year increase in the cost of the median priced home precludes a growing share of households from homeownership and threatens the housing opportunities of future generations. Of course, half of all homes sold are priced below the median. Do these lower priced homes provide a realistic

home ownership opportunity for most renters or first-time home buyers? Sales data show that 25% of homes sold (June 2022 through June 2023) were $400,00 to $500,000 and another 19% were $300,000 to $400,000 (Table 20). But even these lower priced homes require relatively high levels of income to qualify for homeownership. A home priced between $300,000 to $400,000 would require an income of roughly $100,000 to $130,000 and for a home priced from $400,000 to $500,000 the income required ranges from $130,000 to $160,000, daunting income requirements for most first-time homebuyers and renters. Even homes priced well below the median would likely require two incomes in a household and several years’ experience in the job market.

Renters Locked Out by Rent Increases

Only a small share of Utah renter households has sufficient income, $100,000 to $130,000, to purchase a $300,000 to $400,000 home. High interest rates and housing prices exclude a growing share of renters from home ownership. Long-term renters will face a rental market with rising rents and low vacancy rates. The average rental rate in Wasatch Front counties increased at a rate of 6.5% to 7.0% annually since 2011, nearly double the rate of increase in renter’s income. The average rental rate in Salt Lake County is now $1,570, which requires an income of $60,000 to qualify as a tenant. In the past two years the average rental rate in each of the four Wasatch Front counties has increased by over 25%. In Weber County rental rates are up over 30% in two years. The prolonged period of low vacancy rates, nine years with the vacancy rate below 5%, has put upward pressure on rental rates.

Utah’s Housing Forecast: 2023-2024

Utah’s housing fundamentals remain strong; however, demographic, and economic growth are forecast to slow slightly in 2023 and 2024. Net in-migration will likely edge lower due to high housing costs, fewer remote workers, and slower job growth. Employment growth will fall around 2.0%, the lowest level since the Great Recession (except for the pandemic year 2020).

A weaker economic environment will add to Utah’s home building and real estate challenges. The forecast for the number of homes receiving building permits in 2023 is 22,750, the lowest level since 2015. Sales of existing homes will fall to 37,500 in 2023, the lowest level since 2014. However, both home building activity and real estate sales are expected to increase in 2024. Market indicators suggest that the decline in housing prices is near bottom, and year-over increases are likely in the third and fourth quarters.

The 2023 median sales price is forecast at $500,000, just 2% below the statewide median in 2022. The mortgage rate is expected to be near 7.0% by yearend 2023 and trend lower in 2024 to 6.5%. Finally, little progress on housing affordability is likely as price increases return and the housing shortage grows.

August 2023

Median Home Prices Decline After Six Months of Increases

Single-family home prices in Salt Lake County registered a slight decline in August after six consecutive months of increases. In August, the median single-family home sold price fell to $600,000, down 2% from $610,000 in July, and down 1% from $604,000 in August 2022.

During the pandemic, the median price of a single-family home peaked in May 2022 at $650,000. As mortgage interest rates climbed, home prices began falling over the subsequent eight months, eventually bottoming in January at $535,750. In February, prices again started increasing as housing inventory became scarce.

However, interest rates showed little sign of relief, dragging down home sales and sidelining many buyers. On Sept. 28, the average rate on the standard 30-year fixed mortgage jumped to 7.31%, according to mortgage-finance giant Freddie Mac. That was the highest level since December 2000.

Sales of all housing types fell to 1,117 units in August, down 11% compared to 1,253 sales in August 2022 in Salt Lake County. Neighboring Davis County saw its home sales fall to 319 units sold, down 16% compared to 381 units sold in August 2022. In Utah County, the drop was steeper, with just 692 units sold, down 27% compared to 954 units sold a year earlier the same month.

Properties in Salt Lake County typically remained on the market for 22 days in August, unchanged from a year earlier. Under contract listings in the county fell to 1,309 units, down 28% from 1,808 units in August 2022.

Nationally, home sales fell 15% (down from 4.77 million in August 2022), according to the National Association of Realtors®.

“Home buyers face the most difficult affordability conditions in nearly 40 years due to limited inventory and rising mortgage interest rates,” said Jessica Lautz, NAR’s deputy chief economist and vice president of research. “The impact is exacerbated among first-time buyers who are more likely to be from underrepresented segments of the population.”

According to NAR, the top three reasons why Realtors® say buyers have not yet purchased homes are the same as reported by consumers: not enough homes available for purchase in buyers’ budgets (34%), buyers are waiting for mortgage rates to drop as higher prices affect affordability (18%) and buyers are waiting for prices to drop (9%). These three factors greatly impact affordability since limited inventory drives up home prices and higher rates increase monthly mortgage payments.

“Home buyers face the most difficult affordability conditions in nearly 40 years due to limited inventory and rising mortgage interest rates.”

Jessica Lautz

NAR’s deputy chief economist and vice president of research

Salt Lake County

Local Market Update for August 2023

Source: UtahRealEstate.com

NATIONAL BUILDER - LOCAL PEOPLE RICH NELSON

HOMETOWN: Provo, Utah

D.R. HORTON EXPERIENCE: 10 Years

TITLE: New Home Specialist

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