Housing by the numbers: Robust summer muted by rise in interest rate
Kristin Murphy, Deseret News
SALT LAKE CITY — After a summer of brisk activity in the local housing market, a bump in interest rates and a seasonal slowdown have cooled the market and left would-be buyers and sellers trying to assess just where the market is headed.
The percentage of Americans who own a home is at 65 percent, its lowest rate since 1995, a measure of the lasting impact of the housing bubble that pushed uncertainty into the family living room.
But strong sales volume along with growth in median home values through the summer has Utah Association of Realtors President Cal Mussleman describing the state of the market as "healthy.”
He said monthly sales have increased on a year-over-year basis for 24 straight months. From January through August, sales jumped 14.2 percent over the same period last year. Nearly 4,000 properties sold during the month of August and September numbers, once tabulated, could extend the monthly year-over-year streak.
“It’s still (a hot market), just not boiling,” he said.
Recent trends indicate that sales of existing homes have been strong and new home construction is increasing as well, according to Jim Wood, director of the Bureau of Economic and Business Research at the University of Utah.
“We expect this year that residential sales will be close to what they were last year. In addition, home values are likely going to increase,” he said.
That is good news for home sellers like Aaron Johnson, 29, of Lehi. When he and his wife bought their three bedroom, two bathroom home in 2010, they only had one child. The couple is now expecting their fourth child and has recently decided to sell in an effort to accommodate their growing family.
“We noticed (this spring) people in our neighborhood selling their homes for really high dollar amounts,” he said. “So we thought we would try to take advantage of the market.”
The house has been on the market since early August and received a fair amount of interest initially, but has yet to sell. Johnson said the market has cooled a lot and fewer houses in their area are selling compared to a few months ago.
While he is disappointed that their house has not sold, he is hopeful that it won't take too long. He said he is willing to take it off the market if they haven't received an offer by the time their baby is born.
"Then we'll pick it back on the market in February or March, depending on how the market is looking at the time," he said.
Newlywed Armando Villagrana, 20, and his wife, Charnell, 19, have spent the past five months looking for their first home in the southern part of the Salt Lake Valley.
He said now is an opportune time to purchase their first place.
"Right now is the time to buy," he said. "Interest rates are really low and there are a lot of houses for sale."
The couple have already visited more than 20 properties and are optimistic they will eventually find the right place.
Salt Lake County
In Salt Lake County, 1,411 homes and condominiums were sold in August, up less than 1 percent compared to August 2012. According to data from the Salt Lake Board of Realtors, about three of every four homes sold in August sold for less than $300,000. The slight uptick in August sales was in sharp contrast to previous months that posted double-digit year over year sales gains.