BUSINESS + ECONOMY

How long do Utah homeowners need to wait to break even?

Oct 24, 2023, 8:00 PM | Updated: Oct 31, 2023, 9:28 am

SALT LAKE CITY –Rising interest rates are causing Utah homeowners to find themselves in a longer waiting game than anticipated when it comes to breaking even on their properties.

In fact, experts now suggest it could take up to 15 years, a stark contrast to the ideal five-year mark.

This period before a homeowner can break even means selling their homes for the same amount of money they initially invested.

According to data reported by Axios from Zillow, Salt Lake City’s situation stands above the national average of 11 to 13.5 years to recoup their investment.

This extended timeline varies depending on factors like the down payment and the current mortgage interest rate. With interest rates hovering around 8%, homeowners are finding themselves stuck in their homes for extended periods to prevent losing money.

Dejan Eskic, a senior research fellow at the Kem C Gardner Institute, points out that home prices are also on the rise in Utah.

“So if we go back from 1970 to mid-year this year, on average, housing prices in Utah increased 52% every seven years,” he said.

This upward trajectory in home prices adds to the challenge of recouping investments and makes it even more crucial for homeowners to wait.

However, there might be a glimmer of hope for many Utahns currently paying off a mortgage.

The break even timeline for Utahns

Eskic notes that the majority of homeowners in Utah have lower interest rates, with approximately 75% of the 600,000 people with mortgages in the state having interest rates lower than 4%.

Only 5% of homebuyers in Utah have interest rates exceeding 7%, which means that most are in a more favorable financial position.

Homebuyers all around the country are faced with a decision, either accept the prevailing interest rates or hold off their purchase until the market becomes more favorable. However, with the rates as they are now, new homeowners will have to stay there longer to avoid losing money.

Homeowners in Ogden will have to wait about 14 years; it will take closer to 16 years in Provo.

As mortgage rates continue to fluctuate, potential homebuyers must carefully evaluate their options and financial plans to ensure they make the most of their real estate investments.

Related:

We want to hear from you.

Have a story idea or tip? Send it to the KSL NewsRadio team here.

Business + Economy

A car is filled at a gas pump in Sandy on Tuesday, March 19, 2024. Utah gas prices are currently be...

Allessandra Harris Gurr

Utah gas prices below national average in time for summer season

Utah gas prices are below the national average price for gas and the prices are expected to stay that way over the summer.

15 hours ago

Image of Temple Mountain found on BLM land within Emery County, Utah. (Mike Coronella)...

Aimee Cobabe

Utah files lawsuit over BLM Public Lands Rule

In the lawsuit, Utah accuses the BLM of taking a "museum-like" approach to the state's public lands.

1 day ago

Pioneer Stadium in Ogden is getting a $4.3 million upgrade, expected to be complete in time for the...

Tim Vandenack, KSL.com

Ogden’s Pioneer Stadium – site of a major annual rodeo – getting $4.3M upgrade, new name

The upgrade to Ogden's Pioneer Stadium includes additional seats and new equipment for rodeo participants.

2 days ago

Quishing...

Josuee Sanchez

Beware of “quishing” or QR code phishing says Better Business Bureau

Scammers are using "sqishing" or QR phishing to con people into giving personal their personal information.

3 days ago

The front of the Holladay Lions salt lake county recreation center...

Allessandra Harris Gurr

The hidden cost of recreation centers

A new report shows that several recreation centers in Utah operate at a deficit in the millions. Part of covering that gap comes via taxes.

3 days ago

The Utah Women & Leadership Project, based out of Utah State University in Logan, Utah, reports tha...

Alexandrea Bonilla

Report finds fewer Utah workers experiencing sexual harassment

For the first time in years, the number of sexual harassment reports filed with the EEOC places Utah in line with the national average.

3 days ago

Sponsored Articles

Underwater shot of the fisherman holding the fish...

Bear Lake Convention and Visitors Bureau

Your Bear Lake fishing guide

Bear Lake offers year-round fishing opportunities. By preparing ahead of time, you might go home with a big catch!

A group of people cut a purple ribbon...

Comcast

Comcast announces major fiber network expansion in Utah

Comcast's commitment to delivering extensive coverage signifies a monumental leap toward a digitally empowered future for Utahns.

a doctor putting her hand on the chest of her patient...

Intermountain Health

Intermountain nurse-midwives launch new gynecology access clinic

An access clinic launched by Intermountain nurse-midwives provides women with comprehensive gynecology care.

Young couple hugging while a realtor in a suit hands them keys in a new home...

Utah Association of Realtors

Buying a home this spring? Avoid these 5 costly pitfalls

By avoiding these pitfalls when buying a home this spring, you can ensure your investment will be long-lasting and secure.

a person dressed up as a nordic viking in a dragon boat resembling the bear lake monster...

Bear Lake Convention and Visitors Bureau

The Legend of the Bear Lake Monster

The Bear Lake monster has captivated people in the region for centuries, with tales that range from the believable to the bizarre.

...

Live Nation Concerts

All the artists coming to Utah First Credit Union Amphitheatre (formerly USANA Amp) this summer

Summer concerts are more than just entertainment; they’re a celebration of life, love, and connection.

How long do Utah homeowners need to wait to break even?