Before the coronavirus recession, Utah’s housing market was on fire. Then came the COVID-19 pandemic, which sent residents of Northern California and Seattle in search of affordable homes and more space, and an already hot market intensified.
Dave Robison, former president of the Utah Association of Realtors, simply summarizes the activity. “It’s crazy,” says Robison, a Salt Lake City real estate broker.
Its evaluation is not only the art of the sale. Home prices in Utah have soared as Californians flock to the state. Utah has the fastest pace of job growth in the nation, along with the lowest unemployment rate, few mortgage defaults, and low local and state taxes.
All of these factors propelled Utah to the top spot on Bankrate’s Housing Heat Index when it debuted in 2020. Utah continues to hold the top spot for the first quarter of 2022. Residential Real Estate boomed during the coronavirus recession, and Utah became a particularly desirable market.
Other states in the Rocky Mountain time zone are also booming. Montana, Arizona and Nevada rank second, fourth and eighth respectively in the Bankrate Index.
At the opposite end of the list is Louisiana, where price appreciation is among the slowest in the country and mortgage defaults are among the highest. Hawaii – a state that has been hit hard by the COVID-19 pandemic – has fallen from the bottom of Bankrate’s ranking. It rose from dead last in the first quarter ranking to 12th in the index based on winter economic data.
The 5 States With The Fastest Housing Economies
The Housing Heat Index shows how state housing markets are faring in the coronavirus-fueled housing boom and how they might fare in the future. To calculate the ranking, Bankrate analyzed six data points: annual house price appreciation, share of mortgages in arrears, unemployment, annual employment growth, cost of living index statewide and state-by-state tax burdens.
These five states had the strongest housing economies in the first quarter of 2022:
1. Utah – Its home values jumped 26.8% in the 12 months that ended March 31, the third best among US states, according to the Federal Housing Finance Agency. Utah posted the lowest unemployment rate in the nation in March 2022, according to a Bankrate analysis of Labor Department data. Additionally, Utah’s tax burden is among the lowest in the country, according to the Tax Foundation.
2. Montana – Home values soared 25% and Montana posted the top five spots in delinquent mortgages, job growth and tax burden.
3. Florida – Sunshine State home values have jumped 30%, job growth is strong and taxes are low.
4. Arizona – Home values jumped 28%, the best in the nation, and few homeowners fell behind on their loans.
5. Tennessee – Home values are up 26%, job growth is strong and the cost of living is moderate.
Homebuyers are looking for affordability, space
Significant rankings of Mountain Time Zone states illustrate a shift in the housing market: Americans are still attracted to healthy labor markets, but even before the coronavirus pandemic, they were increasingly unwilling to pay to live in places like San Jose, Seattle and Boston.
COVID-19 has caused many people – especially those who can work remotely – to leave the more expensive areas for more affordable regions.
“We are seeing the preparations for a new affordable migration,” says Mark Vitner, senior economist at Wells Fargo. “The beneficiaries of this change have largely been the mid-sized metros in the western mountain states.”
The median price of a single-family home sold in Silicon Valley during the first quarter was $1.88 million, according to the National Association of Realtors. The typical price in Salt Lake City was $556,900 – above the national median, but not dramatically, and just a fraction of the price paid by residents of Northern California.
The price gap has prompted many people in high-cost markets to consider moving. The notion is particularly appealing to workers who can take their well-paying jobs to areas with lower costs of living.
“People suddenly have the ability to choose where they live, because they’re not tied to an office,” says Alicia Holdaway, agent at Summit Sotheby’s International Realty in Draper, Utah, and former chair of the Salt Lake City Board of Realtors. . “We have net immigration that has been happening for years, and it has only increased.”
Every boom brings its drawbacks, of course. In some cases, newcomers to the Utah housing market are loaded with money and ready to drive up prices.
“There’s always a setback,” Holdaway says. “We have seen housing affordability become a crisis.”
The 5 States With The Coolest Housing Savings
As a nationwide housing boom rages, every state saw property values rise in the 12 months ending in September. However, some state economies are struggling with weak job growth and other challenges. The bottom five in our index:
47. Connecticut – This state showed poor performance across the board.
48. Washington, DC — The district’s score was dragged down by low appreciation, high unemployment, and a heavy tax burden.
49. Alaska – Slow job growth and high unemployment have weighed on the northernmost state.
50. Maryland – The state posted a relatively weak 11% appreciation, along with a high level of delinquent loans and a sluggish job market.
51. Louisiana – It ranks worst for delinquent loans, with 6.8% of homeowners behind on their mortgage payments. Louisiana is also doing poorly in terms of price appreciation, job growth and tax burden.