A new study out of the Bureau of Economic and Business Research at the University of Utah’s David Eccles School of Business recently found that this most recent housing cycle has shown the slowest recovery of any post-World War II housing cycle.

Published in BEBR’s latest issue of “Utah Economic and Business Review,” the study analyzed the current housing cycle. The study specifically explored the impact of the Great Recession on Utah’s housing industry, comparing Utah with the rest of the nation. The current cycle has had a number of unique characteristics: falling housing prices record levels of foreclosures and underwater mortgages, a shrinking job market and the lowest mortgage rates since the 1950s.

Although Utah’s housing market has struggled, its real estate industry has fared better. Existing home sales in some Utah counties have recovered 80 percent from the pre-recession peak and the median sales price of a home has fully recovered.

This study, titled “The Great Recession: Utah’s Homebuilding and Real Estate Sectors,” uncovered the following notable findings:

• In the first quarter of 2010, the percent of mortgages in foreclosure in Utah hit an all-time high of 3.3 percent, comprising 14,900 mortgage loans. By the first quarter of 2014, the percent of mortgages in foreclosure had dropped to 1.2 percent of all mortgage loans, comprising a total of nearly 5,000 loans. Historically the percent of loans in foreclosure is 1 percent.
• In 2010, Utah ranked 11th among all states in the percent of mortgage loans with negative equity, with a total of more than 93,000 loans. However, by the first quarter of 2014, the state’s ranking had dropped to 38th, decreasing to a total of just over 29,000 underwater loans.
• Millennials have postponed forming households due to declining housing affordability, which has resulted in reduced demand for housing.
• Those households with low to moderate incomes were hit hardest by falling housing prices. The zip codes in Salt Lake County with price declines of more than 30 percent were almost exclusively those with relatively low-priced homes.

“We’ve never had sustained housing price declines in Utah,” said James Wood, director of BEBR. “We’ve had one or two years separated with years a growth, but we haven’t had a declining year since the 1960s.  In terms of new residential construction, the pre-recession peak was clearly too high but the subdued demand and slow recovery is worrisome.”