By LESLEY MITCHELL

| The Salt Lake Tribune

Interest rates are near historic lows. Real estate is more affordable than it was three years ago. And the inventory of homes for sale gives buyers more choices than they’ve had in years.

So why aren’t more people buying?

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At a glance

Factors to consider when thinking of buying

Mortgage rates are going up but remain low » After hovering for months at the lowest levels on record, 30-year fixed-rate mortgage rates have crept above 5 percent. But even at those levels, 2011 could still end up with the third-lowest annual average dating back to 1971, behind only 2009 and 2010.

Home prices are down, but what happens now with values is uncertain » Some economists believe the market has hit bottom, while others say prices are still falling in most areas of Utah. But along the Wasatch Front, many experts think the bulk of home-price declines have already taken place since the summer of 2007.

Utah’s economy is improving; jobs are returning very slowly » Although few economists expect the economy to worsen, the recovery for many will be long and arduous. Layoffs and pay cuts are less of a threat than they were two years ago, but it will take years for some families to recover from the downturn.

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Certainly, there are scores of potential buyers who no longer can qualify for loans under today’s tighter lending criteria. And others can’t because of layoffs, pay cuts and other recessionary hardships.

Even among those who can and want to buy, many are still holding off out of fear that it just isn’t the right time, but are they missing an opportunity?

"Consumer confidence is really low," said Eric Allen, director of Metrostudy in Salt Lake City, which tracks the housing market."

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Buying incentive » Tyler and Melissa Saxey certainly were in no hurry to buy. It eventually was the threat of higher mortgage rates that convinced the couple, who were renting during much of the downturn, to decide the time was now. The couple moved into their first home in Draper last month.

"Low mortgage rates really were the big deciding factor for us," Tyler Saxey said.

Mortgage rates, though up in recent weeks, remain near historic lows. Some economists predict rates will climb to the mid-5 percent range or even higher by the end of the year and into early 2012.

That possibility is one reason Mark Knold, chief economist of the Utah Department of Workforce Services, said potential buyers might want to consider a purchase. Home prices locally may still fall a bit before the market hits bottom sometime this year, but if buyers wait until 2012, they almost certainly are going to pay a higher interest rate. Waiting, he said, could actually result in a worse buying experience.

But nothing in this market, of course, is certain, which is why the Saxeys approached their home purchase carefully. The pair, who locked in a 30-year fixed rate loan at 4 percent, focused on resale value. They eventually settled on a home built in 2004.

"We aren’t looking to sell for a long time," Tyler Saxey said. "But if we ever need to sell, I wanted a home that would stand out from others, one that would sell quickly."

The fear of buying a home in today’s market — then having trouble selling it for a high enough price to cover the mortgage — remains a real fear driven by the harsh reality of today’s real estate landscape.

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Selling woes » Of about 6,500 active for-sale home listings in Salt Lake County, 27 percent are short sales, according to the Salt Lake Board of Realtors. Short sales occur when a homeowner cannot sell a property for enough money to cover mortgage obligations. They must be approved by the lender, who must agree to accept less than it is owed.

Aside from making it harder to sell a home, the high level of distressed properties on the market tend to push home values lower.

In a recent report, real estate data firm CoreLogic said home prices in the Salt Lake area last year fell by 7.4 percent. If distressed properties were not included, the decrease would have been only 4.8 percent, so the sheer number of distressed properties not only makes it harder to sell but tends to push prices lower.