Utah's housing market faces challenges as median home prices surpass income growth

In the heart of Bountiful, city officials gathered to discuss pressing issues surrounding housing and community growth, revealing a complex landscape of challenges and opportunities. The meeting highlighted a stark contrast between the increasing size of homes and the declining household sizes over the past seventy years. In 1950, the average home in Utah measured around 1,200 square feet, but by 2020, that figure had surged to approximately 2,100 square feet, even as the average household size shrank from 3.7 to 2.5 people.

This trend sets the stage for understanding the ongoing housing demand in Utah, which has consistently experienced population growth since 1950. Notably, the state has never recorded a year of negative growth, thanks to a combination of natural births and net migration. Projections indicate that Utah will see an increase of about 275,000 households by 2033, fueled by factors such as job growth and upcoming events like the Olympic Games.

However, the meeting also underscored a troubling reality: while employment in Utah surged by 40% between 2010 and 2013, home prices skyrocketed by 170% during the same period. Currently, Utah ranks ninth in median sales prices for single-family homes, placing it alongside states like New York and California. This ranking poses significant challenges for potential homebuyers, as the cost of housing has outpaced wage growth.

The discussion revealed that homes were traditionally considered affordable if their price was three times the annual income. However, since the post-Olympic period, many homes have fallen into the "moderately unaffordable" range, and more recently, into the "severely unaffordable" category. In 2023, the median sales price of a home in Utah was 6.4 times greater than the median household income.

In Bountiful, the median home price currently stands at $535,000, with the income needed to afford such a home estimated at around $160,000 annually. This figure highlights a growing affordability crisis, as nearly 90% of renters in Bountiful cannot afford to purchase a median-priced home. The statistics paint a sobering picture: even homes priced at $350,000, which many consider affordable, remain out of reach for 72% of renters.

As the city grapples with these housing challenges, officials acknowledged the complexity of the issue, emphasizing that there is no simple solution. The meeting served as a crucial reminder of the need for collaborative efforts to address the multifaceted nature of housing affordability in Bountiful and beyond.