If you’ve been struggling to find an affordable home, consider house-hunting in Northern Utah. Recently, the National Association of Home Builders (NAHB) named Ogden-Clearfield as Utah’s most affordable metro area for buying a home.
The Ogden-Clearfield metro, which includes Box Elder, Davis, Morgan and Weber counties, also ranked fourth-best regionally and No. 37 nationally among more than 200 metro areas studied.
Even with some price increases, nearly 84 percent of new and existing homes sold between October and December were affordable to families making the area income of $73,000. That’s according to NAHB’s fourth quarter 2016 Housing Opportunity Index.
In Utah’s other metro areas, affordability isn’t quite as favorable but still outperforms the U.S. average. In Salt Lake, about 71 percent of homes were in reach compared to Provo-Orem at 65 percent and St. George at 62 percent.
Nationally, about 60 percent of homes sold are affordable, an eight-year low due to limited housing supplies, rising mortgage rates and ongoing home-price appreciation, NAHB said. Builders are constrained in the number of houses they can build because of shortages in lots, lack of skilled labor and excessive regulations.
“Affordability remains positive nationwide even as demand is outstripping supply in many markets,” said NAHB Chief Economist Robert Dietz. “Though mortgage rates are rising, incomes should rise faster as well, helping to keep home prices affordable.”
Affordability in 2017 will have both positives and negatives. On the plus side, economists expect wages to rise 3 percent, and interest rates, although rising, should remain relatively low at less than 5 percent.
On the flip side, demand for real estate will remain high, and a housing shortage will push up home prices. James Wood with the University of Utah wrote in his Salt Lake Housing Forecast that he expects prices to rise 5 to 7 percent for detached homes and 6 to 8 percent for attached homes.
“Another year of housing price increases will be supported by very favorable fundamentals: low interest rates and solid demographic, job and wage growth,” Wood wrote.
Even though affordability may inch lower due to the higher home prices, many homes in Northern Utah will still be in reach because of strong employment and still-low mortgage rates. Today more than 80 percent of homes in Ogden-Clearfield are considered affordable. That’s in sharp contrast to the housing boom of the mid-2000s when only 49 percent of local homes were attainable.
Tips for homebuyers
With Northern Utah’s favorable real estate market and supply shortage, expect competition. Here are a few tips to keep in mind as you search for an affordable home:
- Get an edge by entering the market sooner rather than later. As the weather gets warmer, interest rates, prices and demand for houses are all likely to go up.
- Be ready to act when you find a home you love. The best houses will not wait for you.
- Hire a local Realtor and establish a strategy for moving quickly.
- Ask your Realtor to set up alerts so you can see new properties within your criteria as soon as they are listed.
- Talk to your Realtor about making an offer. Plan how you will be competitive while still protecting your interests.
- Decide your budget and talk about the highest price you can comfortably pay should you get in a bidding war.
- Determine your must-haves in a home and identify areas where you can compromise.
With a little patience and planning, you can find a home that fits within your budget. Learn more about local market conditions and find a Realtor at NWAOR.com.