2015 4th Quarter Economic and Housing Outlook

HOUSING MARKET 
Home prices stalled slightly both in Utah and nationally in September. In Utah, home prices showed no change from the previous month but grew 6.8 percent compared to September 2014. Nationally, home prices increased 0.6 percent month over month and 6.4 percent compared to September of last year. Housing starts were up significantly in September, increasing 6.5 percent month over month and 18 percent year over year. The increase was mostly driven by growth in multifamily units such as apartments, rather than in detached or attached single-unit structures.

U.S. home values are drawing attention for their apparent resistance to the slowdown that is affecting the global economy. Home prices and rent continue to climb in the United States, fueled in part by tech-heavy geographies where an influx of developers, entrepreneurs, and associated support service employees bid up prices. For instance, San Francisco and Denver both saw a 10.7-percent year-over-year jump in home values—higher than any other U.S. city. It is unlikely that this torrid pace will continue for long; when interest rates increase, high home values will taper. In contrast, earnings have only increased about 2.2 percent over a year ago, well below the national housing price growth rate. While home prices are booming for now, economists don’t expect that to continue indefinitely.
Utah's Consumer Confidence is increased 5.6 points to 115.6 while Nationally that confidence index is down 5 points to 97.6. Expectations for the next six months increased primarily due to a more positive outlook on the labor market and employment situation.

UTAH ECONOMIC OUTLOOK
While ensuring a cleaner environment for our communities, energy alternative innovations will boost energy-based jobs in Utah’s already thriving economy. Electricity for everyday users will remain as magical as it has always been, but the networks of electricity production will become much greener and more efficient over time.

SHORT-TERM U.S. OUTLOOK 
U.S. gross domestic product expanded at an annualized rate of 1.5 percent in the third quarter of 2015, according to the advance estimate released by the Bureau of Economic Analysis. The Federal Reserve reports that while the economy is growing at a moderate pace, it has slowed since the previous quarter, during which GDP expanded at a 3.9-percent annualized rate. While consumer spending remains strong, several key factors have contributed to the apparent economic slowdown: oil prices, global economy, and dollar strength.

From Zions Economic Outlook