SALT LAKE CITY — Utah has one of the highest home-ownership rates in the country, but more people carry mortgages on those homes than the national average.
And that's because of Utah's young population, says Danielle Hale, a research economist at the National Association of Realtors. Utah has the youngest median age, the most people per household and the youngest age at first marriage in the country, says Pamela Perlich, a senior research economist that specializes in Utah demographics at the University of Utah's Bureau of Economic and Business Research (BEBR).
Recent analysis by the National Association of Realtors shows the percentage of those owning a home without a mortgage is relatively low. The study, which used 2008 Census and IRS data, show Utah's rate over 5 percent below the national average.
In the United States 31.6 percent owned a house without a loan secured on that property, while it was 26.2 percent in Utah.
During that same year home ownership in Utah was 76.2 percent, the second highest in the country. Ownership since has fallen slightly, recorded as 72.5 percent in 2010, but remains well above the national rate of 66.9 percent.
Lori Chapman, president of the Utah Association of Realtors, says that family mobility is also a factor. Chapman says that Utah families often move into bigger homes as their families grow. This prolongs the time required to pay down a mortgage.
And since younger families buy newer, starter homes, it often takes a longer time to pay down a mortgage. Colorado and Nevada have similarly low rates of non-mortgaged home ownership while Arizona and Idaho have rates closer to the national average. New Mexico and Wyoming have rates above national average.
James Wood, director of the University of Utah's Bureau of Economic and Business Research and a specialist in housing economics, is not convinced that Utahns will sour on home ownership.
"It is possible to look at the last three or four years, with increased lending standards and market uncertainly, and see a long-term trend toward rental. But I don't think that to be the case (in Utah)," Woods says.
He was here during the recession and inflationary period in the 80's when people were saying the same thing.
In the aughts owner-occupied units grew slightly slower than renter-occupied units according to the Census. Although, as Wood points out, the last Census represents a snapshot taken on April, 2010.
He sees renters moving into homes initially built for ownership. This has led to an increase in low-density renter housing that is more palatable for communities.
The government continues to provide numerous economic incentives for buying a house.
"Homeowners receive an enormous amount of help by the government and Federal Reserve," says Woods.
Families may receive deductions on taxes for property and mortgage interest. And the Federal Reserve helps lower interest rates for borrowing.
Woods expects home prices in Utah to continue to drift down or at best keep level. He says that one third or more of home sales along the Wasatch Front are short sales or REO (Real Estate Owned) sales.
Still, over the past years it has become more difficult for some to buy a home. On the demand side, unemployment and a slower economy hurts opportunities for buying (although unemployment in Utah is 7 percent compared to 9 percent nationally). And lenders remain cautious, requiring higher FICA scores and greater down payments than they once did.
With more mortgages than the national average, one might think Utah also had more foreclosures and delinquencies during the housing crisis. But it turns out not to be the case. According to the most recent Mortgage Bankers Association report Utah's foreclosure rate at 2.4 percent was well below the 4.4 percent national average.
Danielle Hale, a research economist at the National Association of Realtors, says there remain good reasons for owning a home. She says homeownership may help an individual's finances. Homes act as "forced savings plan." Families will do stretching they otherwise wouldn't have to pay a mortgage.
Chapman of the Utah Association of Realtors thinks that Utahns are in a good position to continue to buy homes. The National Association of Realtors Affordability Index of Home Prices report the lowest prices since they started tracking in 2006. She reports that currently a Utahn with a median income has 162 percent of the required income to purchase a median price home.
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