Home, Rental Prices in Utah Still Cost More despite Salary Growth

man stacking coins in front of a stuffed wallet and miniature house; concept of home rental An uneven growth trend for salaries compared to home values and rental prices in Utah are causing a problematic scenario.

Bureau of Labor Statistics said that average salaries rose up to 3% every year since 2010, while data from the American Community Survey (ACS) showed that the median household income has increased by almost 4% between 2014 and 2015. However, prices have grown much faster than income.

Uneven Growth

A Housing Market Profile report noted that the average rental price for an apartment rose climbed 5.8% in last quarter of 2016. In Utah County, rents even surged higher at an 8% increase between 2014 and 2015, according to the ACS.

If you plan to buy a home in the same area, be prepared to pay a heftier price since the Utah County Assessor’s Office said that average prices rose slightly more than 6% between 2015 and 2016, amounting from $344,769 to $365,787, respectively.

On the other hand, sellers in Utah and Juab Counties put their properties on the market from 2015 to 2016 with a higher value of almost 7%, according to the Utah Central Association of Realtors.

Affordability Issues

Despite the increase in home prices and rents, applying for a mortgage refinance here in Utah remains attractive due to relatively low-interest rates. Even as experts do not expect the current rates to go much lower, it somehow offsets the slow wage increase.

A smaller price growth in July also indicated a stabilizing market, which is good news for homebuyers. Black Knight Financial Services’ Home Price Index (HPI) showed that home prices in the U.S. only increased 0.5% compared to 0.9% in June.

In Utah, home values climbed just 1%, as monthly appreciation rates have fallen since March.

The unequal pace of salary growth against home prices and rents may be a problem, yet low-interest rates may continue to be the silver lining for buyers.

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