The Beehive State is also buzzing in the national headlines for another reason: home prices. In only a year, the purchase cost of a house increased by 14%. This put Utah in second place, right next to Idaho, when it comes to the growth of home prices. The spike is also double that of the national average, which is below 8%. If Zillow’s forecast is right, then there’s no stopping the price surge, either. It will further increase by 7.5% within a year’s time. Currently, the median home price in the state is already $340,000.
Why Are Utah Homes Getting More Expensive?
There are two factors: population growth and a bustling economy. According to Refi Guide, two of the states with the highest increases of home prices are Idaho and Utah. Incidentally, they also have the biggest population growths in the country. Census Bureau revealed that the number of residents in Idaho went up by 2.1% from 2017 to 2018. That’s about 35,000 people more. Utah, meanwhile, ranked third at 1.9%, although technically it placed second since both Nevada and Idaho garnered the same percentage increase. World Population Review also went on to say that the population in the Beehive State will only go up in the coming years. By 2060, it will be home to more than 6 million people.
Population growth directly affects the law of supply and demand. When there are more people, the demand for housing goes up. It transforms the state into a seller’s market. It doesn’t help that housing supply is getting scarcer. Another factor is the economy, which is one of the reasons why more people choose to live here. The state consistently ranks as one of the best in doing business. It has a young and educated workforce, according to Wells Fargo. It is also a mixed economy, with thriving industries such as healthcare, tech, agriculture, finance, and mining.
How to Make Your Utah Home Affordable
Overall, though, the quality of life in Utah is high. Utilities are more affordable here than the other states; so are transportation and food and groceries. You just need to learn how to find an affordable home, and here are your options:
1. Venture out of the capital. Consider townhomes for sale in Eagle Mountain, for example. Properties in the area can go as low as $300,000 or less than $290,000.
2. If you have a good credit score and come from a low-income household, you may apply for a Federal Housing Administration (FHA) loan. Down payments are low at no more than 4% of the home price.
3. Put up a higher down payment. Usually, the minimum is 20%, but if you can go higher, then the better. You may no longer have to spend on private mortgage insurance (PMI). You are also more likely to qualify for a lower interest rate and better payment terms.
4. Check out the state housing programs. Utah has many of these. For example, if you have a high credit score and meet the income limit of $96,600, you can apply for a NoMi loan. It provides low down payments and assistance for closing costs.
At some point, Utah’s home prices will drop as sales slow down, but it may not happen anytime soon. Rather than wait, consider your options as, it turns out, there are many.