SALT LAKE CITY — The local economy experienced some improvement in the past month, particularly in the housing sector.
The Zions Bank Utah Consumer Attitude Index fell 2.4 points to 76.5 in April, while the national Consumer Confidence Index climbed 6.2 points to 68.1. The 2.4-point decrease in the Utah index is within the margin of error and does not represent a significant change, the report states.
Despite the slight decrease in the Consumer Attitude Index, some indicators increased, signaling potential optimism from Utahns who now believe their home value will rise in the coming year, explained Randy Shumway, CEO of the Cicero Group.
“More than 61 percent of Utahns now think their home price will increase over the next 12 months, up from 43 percent at the end of 2012,” he said. “This represents the largest proportion in over two years.”
He noted that median home prices statewide are up nearly 14 percent over last year, and the number of homes available for sale is down 22 percent from the same time last year. Nationally, homes prices are up almost 12 percent.
In addition, new home starts increased 31 percent year over year — a five-year high, he said.
“We knew that we had to see a rebound in the housing market in order for the economy to really recover,” Shumway said. “We’re beginning to see that.”
Utahns continue to demonstrate they are more positive about the state of the economy than national consumers, but they are hesitant to embrace the recent economic recovery, he added.
“This is likely due to uncertainty surrounding the ongoing debate in Washington about the budget, the impact of the sequester, and rising gasoline prices,” he said.
The Zions Bank Present Situation Index, a snapshot of current business conditions and employment, decreased 4.8 points to 71.6, compared to the national Present Situation Index, which rose 1.2 points to 60.4. The Zions Bank Expectations Index — which is a proxy for consumers’ expected changes in business conditions, jobs, and personal income — declined by 0.8 points to 79.9, compared to the national Expectations Index, which jumped 9.6 points to 73.3.
The Zions Bank Consumer Attitude Index is based on a representative sample of 500 Utah households. The monthly survey is conducted by The Cicero Group/Dan Jones & Associates.
In more housing news, the Salt Lake Board of Realtors announced that home prices increased during the first three months of the year, marking 12 consecutive months of rising prices.
The median single-family home price in Salt Lake County climbed to $228,750 in the January through March period, up 19 percent compared to $192,500 in the first quarter of last year. Since April 2012, home prices in the Salt Lake area have risen every month in a year-over-year comparison, the report states.
Neighboring Davis County saw its median home price jump 12 percent, with Utah and Weber counties also experiencing double-digit gains. The exception was Tooele County, where home prices remained flat.
The most expensive homes sold in the first quarter were in the 84004 ZIP code of Alpine with a median price of $404,600.
“We expect home prices to continue to rise for the remainder of the year,” said Dave Frederickson, president of the Salt Lake Board of Realtors. “In 2012, the median sales price of a single-family home was up 6 percent, the first time in five years home prices experienced an annual increase.”
The number of single-family homes sold in Salt Lake County during the first quarter was flat. For the three-month period, more people purchased single-family homes in the Clearfield ZIP code 84015 in Davis County during the first quarter than any other area along the Wasatch Front. The South Jordan ZIP code of 84095 ranked second, with the Lehi ZIP code of 84043 ranked No. 3.
Condominium sales in the Salt Lake area also showed gains, rising 18 percent year-over-year. The median condominium price increased to $155,000, up 9 percent compared to $142,000 a year ago.
“We continue to see interest rates at or near historic lows,” said Kim Casaday, president of the residential lending division at Zions Bank. “At this point in time, the thought is that rates are going to stay at their current levels for some time.”1 comment on this story
The combination of low interest rates and reduced inventory may help push the market forward in the coming months, she said.
“As other conditions in the economy start to improve, that is when you are going to see discussions about interest rates increasing,” Casaday said. “But the forecast for 2013 is that rates will stay at this level or near.”