COVID-19 and low interest rates have created bidding wars in Utah's housing market. Rising housing costs could damage the economy as employees and our children can't afford to live here.
Utah currently has the 3rd most competitive housing market in the country, driven by a roughly 55,000-unit housing shortage in everything from single-family homes to apartments. Low interest rates, targeted to help businesses through COVID-19, have had the side-effect of exacerbating our already expensive, limited housing market; low interest rates allow more buyers to enter the market and also increase the price they can consider paying for a home. The result has been that bidding wars occur in 64% of home offers being made in the Salt Lake metro area. Bids of $100,000 over the asking price have become a reality.
In a June poll conducted for the Consumer Attitude Index among both individual Utahns and bank representatives, 60% of respondents said they believe rising home values are having negative effects on the state's economy. With housing costs 20% higher here than in surrounding states, many workers are tempted to leave the state or not come here in the first place, putting us at risk of losing our workforce. I am concerned so many of us are cost-burdened as renters and home owners. With only 35% of households in Salt Lake County able to afford a median-priced new single-family home, finding solutions to this problem is one of my priorities.
Utah has finally begun to address this issue through investing in affordable housing, and more solutions are possible and essential. The following are ways we can address this problem: