The Salt Lake Housing Market continued to surge ahead in the 2nd quarter 2013, with the median home price rising to $249,900, an increase of 17.32% over the last 12 months. Home prices for single family homes have now increased for 5 straight quarters, with the last quarter being the strongest of all, returning a gain of 10.14%. Clearly we cannot keep going at this pace for any length of time, given that if we compounded the gain seen in the last quarter over a full year we would see a return of over 40%, which is unsustainable.

$249,900 – 2nd Quarter 2013
$226,900 – 1st Quarter 2013
$220,000 – 4th Quarter 2012
$217,900 – 3rd Quarter 2012
$213,000 – 2nd Quarter 2012
$190,000 – 1st Quarter 2012

The current rise in home prices has been driven by a shortage of home listings, and the good news is that we are starting to see more homes come on the market, which could ease the current inventory levels. We have also seen an uptick in mortgage interest rates, which impacts home affordability. The short term impact of higher interest rates could actually have the opposite effect, forcing buyers off the fence and into the market or it could put some buyers off buying altogether. Only time will tell what impact these rate rises will have, and it must be said that even with the recent rises interest rates are still at historically low levels.