Increase in Affordability

Report: Utah real estate sees increase in affordability

Home prices in Salt Lake City and other parts of Utah are more affordable than they’ve been in years, according to a national report released Aug. 19. The Housing Opportunity Index, which is published by the National Association of Home Builders and Wells Fargo, said second quarter home prices in the Salt Lake metro area were more affordable than they’ve been since 2005.

The report said that during second quarter 2008, nearly 55 percent of all new and existing homes were affordable to families earning the area’s median income of $65,300. The availability of affordably priced homes hasn’t been this high since the third quarter of 2005 when 58 percent of homes were considered affordable.

Of all the Utah metro areas reported, Ogden-Clearfield had the highest affordability ranking in the state, with 68 percent of homes being affordable to those earning the median income. That’s up from about 61 percent in the first quarter.

The Provo-Orem Metropolitan Statistical Area also saw improved affordability in the second quarter although there were fewer affordable homes in the area compared to Salt Lake and Ogden. Provo-Orem, however, is showing real improvement in terms of affordability. As recently as the third quarter of 2007, only 22.5 percent of homes were affordable to those earning the area’s median income. Now nearly 50 percent of homes are considered affordable.

Even St. George has seen huge affordability gains. In 2006, only 16 percent of St. George homes were affordable; now that number has jumped to nearly 37 percent.