The state now ranks 22nd in the country, with an 11.4 percent increase in housing values in the year that ended Sept. 30, according to a report released Thursday by the Office of Federal Housing Enterprise Oversight. Utah's increase is now less than 1 percentage point below the national average of 12 percent.

"I wouldn't surprised to see us in the top 15 states in terms of appreciation" in coming years, said Salt Lake City economist Jeff Thredgold, a Zions Bank consultant.

Thredgold said Utah's strong job growth will more than compensate for higher interest rates.

He said the state's job growth of 3.5 percent is behind only Nevada, Arizona and Idaho. And more people are moving to Utah, which historically has caused demand for homes - and home prices - to rise.

While housing prices in a number of other states may increase only 3 percent to 5 percent over the next year, Utah prices may jump 9 percent to 12 percent, he said.

Among 265 metropolitan areas, Salt Lake City was ranked No. 97 in appreciation, with a 10.9 percent increase in selling prices over the year that ended Sept. 30. Ogden-Clearfield was No. 136 with an appreciation of 8.1 percent, followed by Provo-Orem, No. 142 (7.6 percent appreciation).

Utah led the country in home-price increases in the early to mid-1990s, as the state's economy thrived and substantial numbers of people moved in. But in the late 1990s and early 2000s, Utah's economy was battered by layoffs and the housing market began to suffer.

Appreciation slowed and, in some neighborhoods, stopped altogether as much of the rest of the nation's real estate market began to take off. At one point, high inventories in Utah plagued many homeowners' efforts to sell their houses.

Only now, at a time when real estate markets in many parts of the United States are cooling off, Utah's real estate market has begun to heat up, said Stephen Blumental, acting director of the Office of Federal Housing Enterprise Oversight.

Neighboring Idaho also is experiencing strong appreciation of 15.1 percent.

The good news, economists said, is that Utah is at little risk of a "housing bubble," which was fueled in part by low interest rates. Utah's appreciation should be strong - but reasonable - in coming years, eliminating the threat of falling prices should interest rates rise significantly.

lesley@sltrib.com

Top states

Utah is now ranked No. 22 among all states in terms of home-price appreciation. Top states are:

1. Arizona, 30.3 percent

2. Florida, 25.2 percent

3. Hawaii, 21.3 percent

4. Washington, D.C.,

20.5 percent

5. Maryland, 19.3 percent

22. Utah, 11.4 percent