A recent study uncovered the harsh reality for potential homebuyers in Utah: they now need a six-figure income to afford purchasing a home in the state. Just five years ago, they would’ve only needed an $80,000 salary. 

According to a study by Bankrate.com, an aspiring homebuyer in Utah needs to make at least $134,000 per year to afford a house with a median price of $525,000, compared to 2020’s median home price of $345,200.  

About half of the states in the U.S. now require a six-figure income to afford a home. Utah is near the top when it comes to states where the annual income needed to afford a house has increased the most since 2020. 

“A combination of high mortgage rates, rising home prices and low housing inventory over the last two years is pushing homeownership further out of reach for would-be homeowners, especially first-timers,” the study said. 

The housing market's struggles stem from a combination of factors, including an influx of cash-wielding West Coast buyers who bought houses in Utah before the pandemic. Then, pandemic-induced interest rate drops further led to a shortage of available housing. As interest rates rose in 2021 and 2022, buyers felt the squeeze of high home prices even more. 

“For first-time buyers, the biggest struggle is affordability,” said Jeff Ostrowski, Bankrate Housing Market Analyst. “Home prices are at record highs, and mortgage rates are above 7%, a combination that’s really squeezing the ability of first-time buyers to find something they can afford.” 

And while home prices have gone up, wages haven’t been adjusted to match them. Wages grew 23 percent between the fourth quarter of 2019 and November 2023, according to a Center for American Progress analysis of Bureau of Labor Statistics data. It would require an almost 50 percent increase for most people in order to afford a house in Utah. 

Ostrowski said lack of income was the biggest factor holding back aspiring homeowners. According to a survey done by Bankrate, 56 percent of survey-takers cited lack of income as the main factor for not buying a home, followed by home prices being too high at 47 percent, and not being able to afford a down payment and closing costs at 42 percent. 

As the housing market continues to evolve, many Utahns find themselves grappling with the harsh reality that owning a home may be slipping further out of reach. 

“It doesn’t seem likely that home prices will decline,” Ostrowski said. “Home prices have soared because there’s more demand than supply, and that’s not changing. Many homeowners are staying put because they don’t want to give up their 3% mortgages. And builders aren’t building enough to keep up with demand.”