By Jasen Lee Deseret Morning News
As the nation feels the impact of declining home sales, Utah may have to take some solace in its steadiness, which when judged against other parts of the nation might be considered stellar. But for how long? According to the National Association of Realtors, the seasonally adjusted index for pending home sales fell nearly 4 percent in July nationwide — the largest such decline since 2001. Especially hard hit were areas with the most expensive homes. Overall, the news for the Beehive State is a bit better. Jim Wood, director of the Bureau of Economic and Business Research at the University of Utah, says July saw new construction fall 20 percent along the four Wasatch Front counties. Additionally, home sales from July 2006 to July 2007 fell 21 percent (on par with the rest of the nation), he said. The silver lining so far is that Wasatch Front home prices over the same one-year period rose 10 percent. Comparing second-quarter 2006 to second-quarter 2007, homes sales in Utah dropped 17 percent, while home prices were increasing a hefty 19 percent, he added. Experts blame part of the national decline on stricter loan standards in the wake of the current lending crisis that has seen a jump in delinquencies and foreclosures as well as the demise of a number of large mortgage lending companies. In the not-so-distant past, lenders were able to offer higher-risk loan products to borrowers with weak credit. The recent shakeout in the mortgage industry has greatly reduced the number of loans lenders are willing to make, especially to lower-income and credit-challenged prospective home buyers. The Mortgage Bankers Association released a report on Thursday stating the number of foreclosures across the country has hit record levels, with part of the blame being placed on subprime loans. The report states that for the third straight quarter, foreclosure notices have hit historic highs. Delinquency rates, which follow the number of homeowners who have missed payments, but have yet to enter the process of foreclosure, are also up for the quarter. Nationally, quarterly delinquencies for all loans outstanding are at 5.12 percent, with foreclosures at 1.4 percent. In the Beehive State, delinquencies are significantly lower at 3.45 percent, which is below the national average. Many analysts are already on record as saying the current housing market is likely to get worse before it gets better. Economists are predicting potentially even worse news for August, with numbers due to come out later this month. Although Utah had lagged behind in appreciation compared to several neighboring states, the gap has closed recently with Utah maintaining its growth, while states like Arizona, California and Nevada have slowed considerably.