Friday, the Utah Foundation released a new report on homeownership. Homeownership is both a symbol of achieving the American Dream and a way it is achieved. However, the housing affordability crisis affects anyone looking to become a first-time homebuyer. Ultimately, high home prices are putting the American Dream out of reach for a growing share of Utahns.
Highlights of the report:
- Recent household incomes were only about 20% higher than in 1985, while home prices had increased by an inflation-adjusted 90%.
- Housing affordability is at historical lows.
- Homeownership is associated with increased wealth and improved educational outcomes.
Commentary:
The report’s author, Utah Foundation Research Analyst John Salevurakis, notes that, “It is important to realize that the roots of the current housing crisis in Utah reach back to at least 2008 and that present and future solutions will not immediately resolve the issue.” Salevurakis continued by noting that “the forthcoming part II of this report details those solutions.”
Salevurakis also notes that, “The ongoing lack of home affordability in Utah has likely both delayed household formation for many of the millennials and first-time homebuyers, possibly expanding a rental culture that could be detrimental to the educational outcomes – and future home prospects – for their children.”
Other report highlights include:
- The origins of Utah’s housing cost crisis predate the pandemic.
- Compared to older generations, millennials saw the largest decrease in housing affordability during peak household formation years (around 27 years old).
- A shortage of housing construction and inventory, along with older Americans staying in their homes for longer periods, likely puts an upward pressure on home prices.
- While there are certainly advantages to homeownership, it is important to recognize the drawbacks.