Utah mortgages: home prices, the 45% residential exemption and Utah Housing help

#Utah home values against Utah incomes

Utah’s median home value is the 7th-highest among the 50 states and DC. The median household earns $96,658, above the national median and the 10th-highest in the country. Divide one by the other and the median home costs 5.6 times the median income — the 9th-highest ratio in the country, against 4.4 for the US.

Utah’s housing is also newer than the nation’s: the median home was built in 1994, the 2nd-newest housing stock among the 50 states and DC, against 1981 nationally. Newer homes usually need fewer big repairs in the first years of ownership, which matters when most of the budget goes to the mortgage.

#What the median Utah home costs each month

On a loan this size, each percentage point on the rate changes principal and interest by about $339 a month. The insurance line uses Freddie Mac’s national average per $1,000 of value; get a Utah quote early. Run your own scenario in the mortgage payment calculator.

#The price a median Utah income supports

Freddie Mac suggests keeping housing costs under 30% of gross income. For a household earning Utah’s median $96,658, that is $2,416 a month — enough for a home of about $327,000 with 10% down, $218,200 below the median value.

Buying the median home within the guideline takes about $161,000 a year in household income. Two incomes, a larger down payment or a smaller or older home are the usual ways to bridge that gap; the affordability calculator shows how far your own income goes.

#Utah’s 45% primary residential exemption

Utah taxes a primary residence on only part of its value. Under Utah Code § 59-2-103, 45% of the market value of qualifying primary residential property is exempt, so the home is taxed on the remaining 55%. The home must be someone’s primary residence for at least 183 days in a row during the year — the owner’s or a full-time tenant’s — and a household can claim only one exemption in the state.

The effect shows up when the same house is not a primary residence. A vacation home or short-term rental is taxed on its full value, so at the same local rate its bill would be about 1.8 times higher — roughly $405 a month instead of $223 on the median home.

#Utah Housing’s new-construction help for first-time buyers

Utah Housing Corporation, the state housing finance agency, offers fixed-rate first mortgages and a subordinate down payment loan through participating lenders. Its FirstHome loan is aimed at first-time buyers with a credit score of 660 or higher, within posted income and price limits.

Alongside those, the First-Time Homebuyer Assistance Program, created by the Legislature in Senate Bill 240, lends up to $20,000 to first-time buyers of a newly built home that no one has lived in, for the down payment, closing costs or a permanent rate buydown. The price can’t exceed $450,000 — below the state’s median home value, so the program fits starter homes rather than a typical Utah house — and the most help is about 4.4% of a home at that cap. You must qualify for a Utah Housing mortgage, and funds are available until they run out. Several other Utah Housing loan programs are listed as temporarily suspended, so ask a participating lender what is open the week you apply. More background is in first-time home buyer programs.

#Utah closing costs

Utah has no state real estate transfer tax, and no state tax on recording the mortgage either. That leaves the usual lender, title, escrow and prepaid items, which the CFPB puts at 2%–5% of the price — $10,904–$27,260 on the median home. The closing cost calculator totals prepaid interest, insurance and the escrow deposit for a Utah purchase.