Utah Wants To Build 35,000 Starter Homes—but the Plan Is Barely Off the Ground

Utah’s housing market has never been hotter—but for many residents, the dream of buying a first home seems further out of reach. With median home prices hovering around $600,000, well above the national median of $439,450, starter homes are becoming nearly impossible to find.

The problem isn’t just rising demand or a shortage of inventory. Much of the state’s new construction is geared toward the luxury market, where multimillion-dollar homes are drawing out-of-state buyers. That leaves many priced out, unable to compete in a market reshaped by high-end development.

“The single greatest threat to our future prosperity, the American Dream, and our strong communities is the price of housing. Our kids will never be able to call Utah home if we don’t start building starter homes again,” Gov. Spencer J. Cox said in a press release.

A statewide push for affordable housing

In 2023, Cox and Lt. Gov. Deidre Henderson announced a sweeping investment toward the state's housing crisis, hoping to build thousands of new homes for its residents.

The Utah First Homes Program is a $150 million initiative designed to spark the construction of affordable starter homes. The program aims to create 35,000 new homes over five years, with support for infrastructure, grants for buyers, and incentives for builders willing to innovate.

State leaders hope to rebalance a market that has tilted toward luxury by prioritizing smaller, more affordable homes. The program also includes “sweat equity” opportunities, allowing residents to contribute labor in exchange for homeownership assistance.

But the homes aren't being built as fast as expected. At a housing summit in May, Cox told the state's mayors that only about 5,100 starter homes had been built or started—with builders slow to join the initiative.

Economists say affordability is the key to unlocking demand.

“Lower home prices and mortgage rates will be important to bring buyers back into the market. As buyer demand returns, available inventory can supply home shoppers with desirable options. However, it will be important for supply to ramp up with demand to ensure price growth doesn’t pick up once again,” says Hannah Jones, senior economic research analyst for Realtor.com®.

The effort comes at a pivotal moment. Nationally, inventory has been rebounding—up nearly 25% year over year in July, with more than 1 million active listings across the country. Utah has seen some of that momentum, with more than 14,000 active listings this summer. But homes still linger on the market for a median of 61 days at prices far out of reach for first-time buyers.

A tilt toward luxury

Part of the challenge is what developers are choosing to build. Across ski towns and golf communities, luxury real estate has taken center stage. High-end homes are selling for $8 million or more in golf neighborhoods and upward of $12 million in ski destinations, according to Paul Benson, a Utah-based real estate agent.

"It appears we have the highest momentum ever for new buyers coming into our market. The majority are looking for new construction, lots of glass, great indoor-outdoor living, and epic kitchens," Benson tells Realtor.com.

Major development projects have drastically shaped the housing market, increasing property value and promoting luxury builds. One massive initiative, called Deer Valley East Village, is a collection of projects that will "evolve and elevate" a 40-year-old resort in Park City, known for its 2,342 acres of skiable terrain, award-winning dining, and slope-side lodging.

Improvements to the resort include several restaurants, a ski school, an ice-skating facility, and the largest ski-beach in North America, according to the Deer Valley East Village information page. With the new additions, real estate agents in Utah have seen the surrounding property skyrocket in price.

"This project includes the tripling of size for Deer Valley resort, a Tiger Woods golf course, a new Four Seasons Hotel, a new Grand Hyatt, and many more under construction," according to Benson.

"Adding that to the 200-plus ultraluxury homes being built in places like Promontory and Tuhaye is currently showing more than 2,000 homes and condos under construction, with the majority being sold already."

Despite the high price range, Benson says he is still witnessing many buyers interested in Utah's real estate.

"We are seeing many buyers from Seattle, San Francisco, Chicago, Houston, and L.A. regularly," he adds. "And frankly, our price points are still lower than many of these cities."