The recent trend toward slowing price growth in the housing market ended in November as the sector took its largest single-month hike since May 2018. Housing costs grew by 1.2 percent and was the largest factor in a 0.7 percent jump in the Zions Bank Wasatch Front Consumer Price Index (CPI). Since last November, the CPI has grown 3.5 percent, while the national Consumer Price Index has increased 2.1 percent.{mprestriction ids="1,3"}
Part of the rise in the housing sector was due to apartment rental rates and hotel and motel prices ticking up. The housing cost rise ended a five-month streak of slowing 12-month price growth. Year over year, housing prices have increased 3.6 percent.
Increasing prices in the recreation and transportation sectors also contributed to higher prices along the Wasatch Front. Prices in the recreation sector rose 3.2 percent in November due to increases in prices for cable and satellite TV, while higher gas prices drove up transportation prices by 0.6 percent.
The 12-month price growth for the recreation sector has risen for four consecutive months and is now at 16.7 percent — the highest level ever recorded in the index. It is now the second-largest factor contributing to year-over-year price growth along the Wasatch Front.
“Utah’s economy remains strong and unemployment is low. This naturally leads to some inflation as consumer demand remains strong,” said Randy Shumway, chairman and partner at Cicero Group, a Salt Lake City-based management consulting firm. “Given that much of the growth is coming in our housing sector, this price growth positively affects the wealth of homeowners in the state.”
On a broader scale, the U.S. Bureau of Labor Statistics announced that national unemployment decreased to 3.5 percent in November, while the U.S. Bureau of Economic Analysis reported that the national gross domestic product increased at a rate of 2.1 percent in the third quarter of 2019.
“We’re seeing some positive economic developments around the country,” said Scott Anderson, president and CEO of Zions Bank. “Nationally, third-quarter GDP growth was higher than expected. This signals that the U.S. economy is faring well, even as some parts of the world are seeing more slowing.”{/mprestriction}
