March 20, 2018 (Salt Lake City) – The Kem C. Gardner Policy Institute today released a timely research brief on the rapid appreciation of housing prices in Utah and the threat to affordability. Researchers found that market conditions confirm a housing shortage in Utah, that the state experienced the fourth highest housing price appreciation since 1991 (outpacing every state but Colorado, Oregon and Montana), and that Utah incomes fail to keep pace. Utah households with income below the median for all households experience the greatest affordability challenge. The research identifies strong housing demand; increasing land, labor and permitting/development costs; and Wasatch Front topography as major reasons for Utah’s rapidly rising cost of housing.
“Housing prices in Utah will continue to increase at rates well above the national average due to relatively high rates of population and economic growth,” said Jim Wood, Ivory-Boyer Senior Fellow at the Gardner Policy Institute. “But, the threat to affordability from rising prices may be secondary to increasing interest rates, which could significantly reduce housing affordability and homeownership opportunities for a large share of Utah households.”
The Salt Lake Chamber, Utah’s largest business association, contracted with the Kem C. Gardner Policy Institute to conduct this research. Senior business leaders in the state wanted a better understanding of Utah’s housing market and the challenges to affordability in the Beehive State.
Housing affordability is defined as a housing unit in which an owner or tenant pays no more than 30 percent of their household income toward housing costs. The term is often confused with affordable housing, which is a term often used to describe the availability of affordable housing units targeted for low, very low, and extremely low income groups.
Additional key findings and details from the new research include the following:
- Household income and affordability —