The cost of having a place to live in Utah just continues to grow. In November, the Zions Bank Wasatch Front Consumer Price Index (CPI) recorded the largest month-to-month increase in housing costs since the bank began tracking consumer prices in 2010. The 0.7 percent housing cost hike was the major contributor to a 0.1 percent overall rise in consumers prices from October to November.
Utah’s 5.2 percent year-over-year CPI rise is running well ahead of the national Consumer Price Index, which sits at 2.2 percent since November of last year.
In addition to rising housing prices, food-at-home prices also grew, as produce prices increased going into winter and as recent concerns for E. coli in romaine lettuce boosted demand for other produce.
Utility and transportation prices declined month over month. Utility prices dropped 3.5 percent in November due to scheduled seasonal decreases in water and gas rates. Transportation also dropped 0.4 percent in November, marking the fifth consecutive month that transportation rates have fallen.
The year-over-year increase in Utah housing and transportation costs continues a trend since August 2017 of both sectors seeing higher-than-average increases. Housing’s year-over-year jump of 8.7 percent is also a record. Transportation increases have reversed in the last few months, but the year-over-year increase is still significant at 7.9 percent.
CoreLogic has reported that Utah had the fourth-highest year-over-year home price change, well above the nationwide home price change of 5.4 percent.
“Utah’s strong job market continues to drive real estate prices,” said Scott Anderson, president and CEO of Zions Bank. “Even though the growth rate of housing prices may begin to slow, we anticipate that the state’s rising real estate prices will continue to outpace price growth nationwide.”
Contributing to climbing real estate prices are constraints on development, including availability of land for development, said Randy Shumway, chairman and partner of Cicero Group, a Salt Lake City research firm that does data gathering and analysis for the CPI.
“Housing is a product with long lead time for development,” Shumway said. “The consequence of this is that you tend to have cycles as building lags demand by one to two years. Effects of added supply will not be seen until significant new housing comes online.”