Tooele Transcript Bulletin – News in Tooele, Utah

November 19, 2019
Increased home prices making affordability a big challenge

Low inventory has many families struggling to find housing options 

The Salt Lake Chamber released a report in 2018 claiming that statewide the growth in households outpaced the growth in housing, creating a shortage of 54,000 housing units.

The housing gap, along with other economic factors, caused housing prices to increase resulting in a financial gap for families trying to find housing — both owned and rented, according to the Chamber’s study.

“This housing gap has left many Utah families struggling to find housing options that are affordable,” reads the report.

There is some data that shows the increase in home prices may be outpacing income in Tooele County, contributing to a local housing affordability gap.

At the end of the second quarter of 2019, Tooele County real estate professionals said the housing shortage was a factor in increasing home prices in the county.

“It’s been a great year for real estate in Tooele County so far,” said Heidi Purvis, real estate agent with Wise Choice Real Estate and president of the Tooele County Association of Realtors. “Prices are up and it’s supply and demand. There is not a lot of inventory.”

The median home price in Tooele County grew by 10.7% in 2017, from $205,000 in 2016 to $227,000 in 2017. During that same time period the median household income in Tooele County grew by 11.4%, from $65,000 in 2016 to $72,386 in 2017. 

2017 is the most recent year with median household income data available from the Utah Department of Workforce Services.

Housing affordability is defined by the U.S. Department of Housing and Urban Development as when housing costs are 30% or less of household income. 

Housing costs include mortgage, insurance, taxes, and utilities for a homeowner. For a renter, housing costs include gross rent and utilities costs, if utilities aren’t included in rent, according to HUD. 

When housing costs exceed 30% of household income, HUD refers to the household as “housing-cost burdened.”

According to the U.S. Census Bureau’s American Community Survey 2017 1-year estimates, an estimated 25.7%, or 1 out of 4 homeowners with a mortgage in Tooele County, were spending 30% or more of their income on housing costs in 2017. 

For renters, the estimate was 42.4%, or a little over 2 out of 5, renters in Tooele County were paying over 30% of their income for housing costs in 2017.

Comparatively, out of the seven counties with data reported in the 2017 ACS estimates — the 1-year estimates only include data for counties with a population of 65,000 or more — Tooele County ranked as the second highest percentage of homeowners with a housing-cost burden. Tooele County ranks fourth out of the seven counties in terms of the highest percentage of renters with a housing-cost burden.

Along with Tooele County, the counties included in the ACS 2017 1-year estimate were Cache, Davis, Salt Lake, Utah, Washington, and Weber counties.

Another measure of housing affordability is the number of years of median income it would take to buy the median home.

By dividing the current year-to-date median home sales price in Tooele County of $275,658 by the 2017 median county household income of $72,198, it would take 3.82 years of the county’s median income to buy the county’s median home.

Tooele ranks as the 10th lowest county of the state’s 29 counties in terms of the number of years it would take to pay off the median home with the median income. It is the lowest of any county along the Wasatch Front and lower than the state average of 4.65 years.

State law defines moderate income housing as housing occupied or reserved for occupancy by households with a gross household income equal to or less than 80% of the median gross income for households of the same size. 

With the 2017 median household income of $72,198, 80% of that would be an annual household income of $57,758. Using the HUD definition of affordable, the household earning $57,758 would be able to pay up to $1,444 per month for housing without being housing-cost burdened.

In 2017, the mean housing cost for renters in Tooele County was $1,159. The mean housing cost for a homeowner with a mortgage was $1,301, according to 2017 ACS estimates.

The 80% mean household income in Tooele County would be enough to cover either of those housing costs, according to the HUD definition of affordable.

A household would be able to make as low as $46,360 per year, or 64% of the median household income and still meet the $1,159 annual rental cost without being housing-cost burdened.

However, to make the 80% of median household income, or $46,360 annually, the household would need to earn a combined total of $22.29 per hour, assuming an average 40 hour work week with no overtime.

The median household income of a renter was $37,024, according to 2017 ACS estimates.

Apartments, like homes, are in short supply in Tooele County.

“A survey of apartment communities (rent assisted and market rate) shows a very low vacancy rate, below 4%. Rent assisted are fully occupied with waiting list and the four large market rate projects in the county have very low vacancy rates. Rents have moved up as well,” wrote James Wood, author of the 2018 Affordable Housing Needs Assessment for Tooele County.

Wood also wrote in his executive summary of his affordable housing report: “Housing market indicators point to a housing shortage in Tooele County with increasing prices for both homeownership and renters and very low vacancy rates. Currently, most major housing markets in Utah face similar conditions. Housing demand is outpacing the supply of new homes and apartments.”

 

Tim Gillie

Editor at Tooele Transcript Bulletin
Tim has been writing for the Transcript Bulletin since October 2017. In February 2019 he was named as editor. In addition to being editor, Tim continues to write about Tooele County government, education, business, real estate, housing, politics and the state Legislature.A native of Washington state and a graduate of Central Washington University, Tim became a journalist after a 20 year career with the Boy Scouts of America.

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