Home sales in the American West tumbled to a three-year low in December, as higher interest rates and rising home prices gave buyers pause, according to a new report from the National Association of Realtors.
“Home prices have risen too fast, too soon,” said Lawrence Yun, chief economist with the National Association of Realtors.
The Mountain West has seen strong job growth in recent years. But wages have remained stagnant and housing prices in places like Denver and Salt Lake City have nearly doubled since 2010, Yun said.
“This was such a fast growth in prices that even those with jobs simply cannot afford to buy a home,” Yun said.
This helped lead to a 15 percent slump in sales across the West in December and a slowdown in rising prices. Affordability is an issue in Salt Lake City, according to Christy Vail, president of the Utah Association of Realtors.
“I don’t think people realize — as far as cost — how quickly we can remove people from the home buying market,” she said. “Just a $1,000 cost increase can remove about 1,300 people out of being able to purchase a home.”
But on the bright side, the changing market may lead to better deals for those who can afford to purchase a home in states like Utah.
“It was a frenzy maybe a year ago. It’s not that sort of frenzy now,” said James Wood, a senior economist with the Kem C. Gardner Policy Institute at the University of Utah. “It’s not a bidding war like it was in most cases, but it’s still a strong market.”
This story was produced by the Mountain West News Bureau, a collaboration between Wyoming Public Media, Boise State Public Radio in Idaho, KUER in Salt Lake City and KRCC and KUNC in Colorado.
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