It’s no secret that Utah’s housing market has been on fire this year. The inventory shortage has been particularly concerning among first time home buyers. While it is true that newly constructed single family homes are up 37% compared to last year, it’s important to note that last March was when COVID took hold.
Housing demand is expected to remain strong, but the effects of COVID-19 are slowly waning. The industry has seen an increase in supply by as much as 20% in recent weeks and the increase in new construction is helping keep housing prices from skyrocketing.
The still record low mortgage rates and improving labor market is also encouraging. As the country begins to return to normal, the housing market will likely even out despite the fact that this past March was still the strongest on record since 2006.
Another strong indicator of recovery is the increase in construction permits being issued. Permits are up by 4.6% since February providing more home options and reducing the pressure of low inventory. It is also encouraging to see that completion of single family homes is up 5.3% in March.
The downside of this increase is a rise in the cost of building supplies. Because of the depleted inventory, building prices are rising by as much as $24,000 per home. Due to the rising cost, many home buyers are focusing on existing homes despite rising prices there as well.
While the soaring housing market in the midst of a pandemic is surprising to some, there is speculation that as things return to normal, the housing market will reflect that as well. Inventory is expected to increase during the course of 2021.
If you are in the market for a new home, whether you are looking for an existing home or new construction, The Fields Team is here to answer your questions. Shoot us an email and someone will reach out to you immediately.