Residential construction remained strong in Utah last year despite a big drop in population and job growth, factors that usually put a damper on new housing growth, the University of Utah Bureau of Economic and Business Research reported Monday.

Bureau researchers James A. Wood and Diane S. Gillam credit low mortgage rates and smaller price increases on new homes for the continuing strong demand that saw $2.2 billion in new home permits taken out in 1999.That figure represents a record high valuation for the state, they note in the Bureau's fourth quarter Utah Construction Report, but at 20,350 new living units, 6.4 percent fewer homes were built in '99 than the previous year.

Why the discrepancy in total value of new housing construction vs. the number of units? Wood and Gillam cite the trend toward larger, more expensive single-family homes constructed last year while fewer lower-valued multifamily units were built.

The housing growth was very concentrated last year, with nearly half of the new homes constructed in Salt Lake and Utah counties. West Jordan led all cities with 1,479 new units, which was nearly double second-place Tooele. St. George, Ogden,

Draper and West Valley City were the other leaders. Unincorporated Salt Lake County also was strong with 900 new units.

There were 14,561 new single-family homes built in Utah last year, along with 4,443 new multifamily units and 1,346 mobile homes and cabins.

Although mortgage rates moved up from the 30-year low of 6.7 percent in the last three months of 1998, last year's range of 6.8 percent to 7.8 percent remained low enough to keep demand high for new housing.

Combined with the recent slow-down in price appreciation on single-family homes to below 3 percent, buyers could find no reason to delay their homebuying plans.

Wood and Gillam also cite lenient down payment requirements by lenders, the stock market boom that has fueled demand for second homes, the desire of many homeowners to "move up" to larger homes and the increasing number of younger people (under age 25) to form households.

"All of these factors have contributed to the prolonged housing cycle and another 20,000-unit year in 1999," they said.

As noted, while the single-family home sector remained strong last year, multifamily dwellings, especially rental apartments, weakened, falling nearly 30 percent to 2,700 units in 1999 from the previous year.

Wood and Gillam trace this trend directly to the drop in net in-migration and favorable mortgage interest rates that have converted renters to owners.

Construction of condominiums, twin homes and duplexes also was down last year, although the 10 percent drop was only about a third of the falloff in apartment construction.

You can reach Max B. Knudson by e-mail at