The COVID-19 pandemic has affected every aspect of our lives, and the housing market is no exception. In particular, Utah’s is actually hotter than ever. Read on to learn how COVID-19 has impacted the housing market in Grantsville, UT and made this a very busy time for home builders and buyers alike.
High demand, low supply
Home buyers across the nation have been flocking to the Beehive State. Due to prospective buyers greatly outnumbering available properties, the Salt Lake City metropolitan area has skyrocketed to the third-most competitive housing market in the country, with the steepest decrease of 47 percent in overall listings from the previous year. Bidding wars have become increasingly common statewide, with inventory along the Wasatch Front staying on the market for a median of 20 days in May 2020 compared to a national median of 37 days.
Some sellers may also be reluctant to open their homes to potential buyers due to the pandemic, which could be another cause for the low inventory. Traditional practices of open houses and showings have been upended by the pandemic, which may also deter potential sellers from putting their homes on the market in the first place.
High home prices
Historically, home prices in Utah have been on par with the national average. That’s no longer the case these days, as the intense competition for housing has driven the mean price in Utah to $365,000, which is more than 40 percent above the U.S. average price of $252,000.
Low interest rates
Despite soaring home prices, the housing demand has been exacerbated by interest rates falling to historic lows. According to Freddie Mac, 30-year fixed rates for home mortgages in Utah dropped below 3 percent, which is the lowest it’s been since the 1970s. Financial institutions are experiencing record numbers of applications for new mortgages and refinancing, despite the economic downturn due to the pandemic.
Increased lead time and cost of materials to build a house
With the existing housing inventory so depleted, many prospective homeowners are turning to new residential construction projects instead. However, the global pandemic has severely disrupted the supply chain in the construction industry. Building materials have been increasingly more difficult for builders to acquire to keep up with demand, resulting in both construction delays and higher costs.
Lumber prices are also currently at a record high of over $1,000 per 1,000 board feet, with the price doubling over the three months from November 2020 to February 2021. High material costs likely contributed to the 12 percent decrease in housing starts nationwide from December 2020 to January 2021. Compared to the same time the year before, the number of single-family homes permitted but not started was 28 percent higher in December 2020. Home builders are eager to get started on their projects, but there are staggering obstacles in their way.
Looking for a new home in Grantsville, UT? The home building experts at UpDwell Homes LLC are dedicated to not only providing our customers with a quality home, but a better quality of life as well. Contact us today to schedule a consultation!