Why Utah Grapples with Shortage of Affordable Homes

Utah’s strong economy and stable employment are only some of the factors why many homebuyers decided to get properties in the state, whether as a place to call home or as an investment. Yet most of these buyers find it difficult to close a deal for a variety of reasons, including the pent-up demand that drives intense competition. Despite the Federal Reserve’s interest rate hike, Altius Mortgage Group noted that mortgage rates in Utah seemed to move in the opposite direction, as opposed to an expected surge due to the federal rate hike.

Swift Sales

Aside from tight competition, many homebuyers with a small budget face a greater challenge in acquiring properties. If you’re one of those who has limited funds, you may have found a listing and placed an offer only to discover that at least three or four people also want the same property. A buyer with a more flexible budget is more likely to outbid competing for offers. Unfortunately, not many people can afford to field an amount so they could purchase a house, especially with rising prices. What’s more, a lack of supply for low-cost homes further complicates matters for most buyers who particularly seek affordable properties. This ratio of high demand and low supply for affordable housing is expected to persist, as the state’s population continues on an upward trend.

Population Boom

More than three million people live in Utah in 2016 and while the economy has been remarkable, it hasn’t contributed to better prospects in the housing market. The growing population also brought certain issues. In Salt Lake City, for example, the number of homes for sale fell 69.5% between 2012 and 2017. Still, home buyers may find a silver lining through lower interest rates, as it makes applying for mortgage loans somewhat bearable amid increasing home prices. A high demand for low-cost homes and short supply caused home prices to increase in Utah, so it’s likely a good idea to seek financing assistance for your home purchase.