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.


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