Here’s how much you need to earn to buy a home in Utah — without going over budget

The Salt Lake Tribune looked at median home sale prices and calculated the needed income to spend less than 28% of monthly pay on a mortgage. Here’s what we found for all of Utah’s 29 counties.

This story is part of The Salt Lake Tribune’s ongoing commitment to identify solutions to Utah’s biggest challenges through the work of the Innovation Lab. [Subscribe to our newsletter here.]

Depressing, frustrating and out of reach.

That’s how potential homebuyers, real estate agents and builders alike describe Utah’s current housing market.

Housing affordability is top of mind for many Utahns. It was among registered voters’ top concerns in a recent survey by the Utah Foundation, which found more Utahns think the state is headed down the wrong track than in the right direction.

And homeownership is indeed out of reach for the majority of renters. Just 15% of Utah’s renter households can afford a home that costs between $300,000 and $400,000, according to a report on the state’s housing market. That’s $90,000 less than the median sales price for existing homes so far this year.

A Salt Lake Tribune analysis of data from the Utah Association of Realtors, the U.S. Census Bureau, the National Association of Realtors and CBRE found the typical renter household can only buy a home and spend less than 28% of their income on a mortgage payment in Beaver County.

Home prices are down from their peak in February 2022, but the median sales price is still close to $500,000. High interest rates compound the problem.

The median sales price for nearly 9,000 existing homes sold this year across Utah’s 29 counties was $490,000 as of March, and ranged from $185,000 in Beaver County to $1.3 million in Summit County.

Assuming a 10% down payment and 6.43% interest rate, that means the typical mortgage payment in Utah for new homeowners is $3,043 and varies from $1,149 in Beaver County to $8,026 in Summit County.

A higher down payment would mean a lower loan, but interest rates right now are often higher than 6.43%. Those payments also don’t include property taxes or home insurance costs.

Altogether, that means Utahns need to make about $130,400 a year to afford a mortgage, though the number varies by county, from $49,234 to $343,975.

The median income for a renter household is lower than the needed salary in all but Beaver County, where it takes $49,234 to afford a mortgage on a $185,000 median sales price home and the typical renter household has an income of $68,482 a year.

In other counties, renter households fall short of needed income by an average of about $75,000 and as much as $260,000.

Kris Crockett, who’s searching for a home in Salt Lake City, said it’s hard for her to wrap her mind around how much a home in the state’s capital would cost.

Prices may drive others to a new state, but searching outside Utah wouldn’t necessarily help unless people continue making a similar income to their pay here.

For example, Little Rock, Arkansas, is the most affordable city out of 42 metropolitan areas for which the Tribune analyzed data.

The median sales price for an existing home there at the end of 2023 was $200,000.

Assuming a 10% down payment and 6.43% mortgage, that would be a payment of $1,242 a month, requiring an income of around $53,200 to spend less than 28% of monthly paychecks on a mortgage.

That’s nearly achievable for the typical renter in Salt Lake City but is out of reach for renters in Little Rock, where the median renter household income is about $39,000.

The ultimate solution — according to real estate agents, homebuilders, experts and legislators — is more housing inventory.

Utah likely faces a shortage of at least 37,000 housing units. Yet building, which spiked during the pandemic, is slowing.

Experts expected building to pick back up this year, but there’s still a “massive” shortage, said Jessica Bryce, vice president of marketing for EDGEhomes.

Bryce encouraged people looking to buy to get pre-qualified so they can set their budget and to buy what they can afford instead of holding out for a dream home.

Adam Kirkham, president of the Utah Association of Realtors, said buying sooner rather than later could be a good idea. Once interest rates drop, he said, competition for homes will increase again.

Megan Banta is The Salt Lake Tribune’s data enterprise reporter, a philanthropically supported position. The Tribune retains control over all editorial decisions.