Utah leads the nation in homeownership rates. But now young people in the state are struggling to achieve the American dream.
And a new report from the Utah Foundation found that Californians moving here are not entirely to blame.
“The current housing crisis is not entirely a function of current migration trends, Utah’s recent economic growth, or pandemic related supply chain issues,” John Salevurakis, the report’s author wrote to The Tribune. “The reality is that Utah has been generally underbuilding relative to household formation since the financial crisis and that this has adversely impacted the ability of Millennials to afford homes when compared to previous generations.”
Here are five numbers from the report that outline just how bad things are in Utah.
Home prices are rising faster than wages across the United States
According to the Utah Foundation report household incomes only rose by about 20% from 1985 to 2021. But home prices increased by 90% in that same period of time.
That mismatch could be contributing to Salt Lake City’s current status as the 14th least affordable metro area in the U.S.
Fewer than 12% of homes sold in Utah in 2022 were affordable to people earning the median income.
For a Utahn earning $89,200 a year (the median income) to avoid spending more than 30% of their income on housing their mortgage payment would have to be $2,230, the report noted.
That would be a $270,000 house. The median sale price of a home in Utah that year: $574,000.
Millennials hit hardest
Millennials may not get a break and see the same levels of housing affordability that older generations had until 2030 or later, the report notes.
“With interest rates and rent trends as they are, at least some owners who might otherwise sell their properties are incentivized to keep them,” Salevurakis told The Tribune.
Building permits have decreased from a 2021-2022 peak
Despite a Salt Lake County apartment building boom between 2006 and 2014 the housing market is still tight. The report notes that “household formation in Utah outstripped newly available housing units from at least 2010 to 2017.”
Plus, while the apartment building boom “helped to fill the gap created by declining single-family housing permits” it did not boost the stock of homes available for sale.
Homeowners are building more wealth than ever
The report notes that homeownership is one of the most important tools to building wealth in the United States. In 2013, homeowners saw a $9,500 increase in their wealth on average per year. Between 2012 and 2022 homeowners were gaining $19,000 per year on average.
