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SALT LAKE CITY -- A University of Utah researcher says homeownership is set to hit record lows, not just nationwide but even here in Utah. But not everyone's on board with the numbers.
Arthur C. Nelson is the director of the U's Metropolitan Research Center. According to the Census Bureau, the percentage of households that own homes peaked just shy of 70 percent in 2004 and 2005 nationwide. In the second quarter of 2009, that number had slipped to 67.4 percent.
In his study titled "The New Urbanity: The Rise of a New America," Nelson projects the number of homeowners nationwide will continue to slip to 63.5 percent by the year 2020; that would be its lowest level since 1985.
In Utah, homeownership is currently at about 72 percent. He expects Utah's numbers to hit 65 percent eventually. But he doesn't think it will take that long for Utah's numbers to reach a record. He says that could happen within two years, when the numbers dip below 70 percent.
Homeownership, long viewed as the epitome of the American Dream, is on the decline, with Nelson predicting more and more housing units added over the next 10 years to be rentals.
Grant Whitaker, president and CEO of the Utah Housing Corporation, believes the drop is in part due to foreclosures, and in part due to other factors, such as a lack of confidence. But he says there are still positive signs amid the numbers. For example, the Salt Lake Board of Realtors says Utah is second in the country for homeownership. So even with a large drop, we'd likely still lead the nation.
"We're still going to be higher than the nation's average," Whitaker agrees. "Clearly we will."
As to the impact of confidence on the market, he says buyers need to realize if they've got good credit and a down payment, there's no reason not to buy a home.
"I would encourage them," he says. "Now is a good time to buy. In fact, now is a good time to move up, too," Whitaker added, pointing to low interest rates and dropping prices.
The Utah Housing Corporation is the agency that oversaw the state's Home Run Grant program earlier this year, which offered buyers of new construction a $6,000 grant to help them make the leap from renting to buying. Whitaker says its success is more proof that buyers are willing to pick up homes under the right circumstances.
Whitaker says the state had 3,000 or so newly constructed homes in inventory at the beginning of the year. At the end of 12 weeks, Home Run was out of money and buyers had bought 1,600 of those homes in the inventory.
Whitaker believes the housing industry is key to ending the recession. He says when people buy houses, especially new homes, they stimulate the economy close to home, because of the materials like bricks, lumber and even doors and windows that must be used.
The Salt Lake Board of Realtors sees other reasons why Utah may not entirely drop in homeownership as quickly as the U study forecasts. Single-home prices have fallen 11 percent in Salt Lake County since their peak in the summer of 2007. And home sales in June and July are both up over the June and July of the year before, signs that recovery could be ahead.
By the numbers (Source: Census Bureau):
- Utah had the 2nd highest homeownership rate in the country in 2008 at 76.2 percent
- West Virginia was number 1 at 77.8 percent
- The national homeownership average in 2008 at 67.8 percent, down from 68.1 percent
E-mail: bbruce@ksl.com
