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It's a pretty good bet that if the national inflation figures for August had come in Tuesday at the same rate as the Wasatch Front's 0.8 percent hike in prices, the Dow Jones industrial average would not have gone up 19.52 points as it did.

More likely, the Dow would have reacted as it did Friday when a hike in 21 commodity prices that are closely watched as inflation barometers drove stock prices down 33.65 points, the biggest one-day decline in two months.If you just look at the average numbers for all categories of First Security Bank's monthly Wasatch Front Cost of Living report and compare the 0.8 percent hike in August over July to the 0.4 percent rise nationally (both figures nonseasonally adjusted; the national was 0.3 percent seasonally adjusted) it appears that inflation is running amok in Utah while remaining relatively benign across the rest of the country.

But the averages are deceptive, notes First Security chief economist Kelly K. Matthews, because the Utah averages of eight spending categories are skewed by the continuing rise locally in the cost of housing.

For example, when comparing the past six months with the same period one year ago - a more accurate barometer than comparing one month to the next - housing costs along the Wasatch Front have soared 8.1 percent. By comparison, housing costs nationally have gone up only 2.6 percent for the same period. Housing costs as measured by First Security are based on rent rates, but Matthews said the figures generally correlate to overall housing costs, including prices of homes for sale.

Housing is the largest expense category in the monthly survey of living costs, and it also gets the greatest "weight" among the individual categories, which also include transportation, health care, groceries, clothing, eating out, utilities and miscellaneous.

But, ironically, while most of us are affected on a monthly basis by changes in prices of food, gasoline, electric bills, medicines and such, we are usually not impacted by the rise in housing costs. In fact, if you live in the same house for years, as most do, you might wonder what all the fuss is about.

Moreover, if you refinanced your mortgage to a lower interest rate, your housing costs went down even while the value of your home was inflating.

That's the irony of the Wasatch Front's cost of living being double the national average: A local housing boom skews the average. If housing is left out of the equation, Utah's cost of living looks pretty good; in fact, two categories were below the national average for the six months: utilities down 5.1 percent compared to a 2.6 percent increase nationally and restaurant prices down 3.7 percent compared to a 1.5 percent hike nationwide.

But Matthews points out that today's local housing boom could well turn into tomorrow's - or 1995's or '96's - housing bust. With homes and apartment units currently going up at a frantic pace, it's almost inevitable that an oversupply is waiting somewhere down the road.

That's because there is no effective way to avoid the pendulum effect of boom and bust. The housing market - in fact all real estate - is not efficient enough to react instantly to changing conditions.

"There simply is not a good mechanism to make supply and demand of housing come out even," he said. Thus the boom-and-bust cycle goes on.

First Security launched its monthly Wasatch Front Cost of Living Index in March 1988, and for all of the six years since then, local inflation has lagged the national average, often by a large margin.

But this year the gap has been closing, mostly due to the housing category. Although Utah still lags the national average by 2.1 percent - up 25.7 percent locally since 1988 vs. a 27.8 percent increase nationally for the same period - the percentages are merging.

It's not a race Utahns want to win - although most homeowners like the idea of their houses dramatically increasing in value - but it's not inconceivable that, if the cost of local housing continues at its current pace, we could have the dubious distinction of passing the rest of the nation in our local rate of inflation.