Buying vs. Renting in Salt Lake City: Is It Too Late to Buy?

I am a landlord, and the tenants in several of my units have been there for more than five years. Every year they tell me they want to buy something, and every year homes get more expensive. So each year they stay, and each year the goal drifts a little further away.

Here's the part that stings. If they had bought back in 2021, they'd have locked in a mortgage rate somewhere between 2% and 3% — and they'd have paid roughly 80% of what the same house costs today. In Salt Lake County, the median single-family home sold for about $532,000 in 2021; today that number is closer to $650,000, an increase of more than 22% in five years. Add in the jump from a 2–3% interest rate to today's ~6.75%, and a house that was comfortably affordable in 2021 now feels out of reach.

So the natural question is: is it too late? Or are today's prices the ones we'll look back on in 2031 and call "cheap"?

I'm fairly confident Salt Lake housing will keep appreciating over the next five years. But price is only half the story. The other half is rent — and rent never stops climbing. So instead of guessing, let me actually run the numbers on a real Salt Lake scenario.

The Setup: A Sugar House House

In the Sugar House area, you'll spend around $3,400/month to rent a 2,000-square-foot house with 4 bedrooms and 2 bathrooms. If you bought that same house, it would run about $720,000.

Here's what buying looks like at today's rates:

• Purchase price: $720,000
• 20% down payment: $144,000
• Loan amount: $576,000
• Mortgage rate: 6.75%, 30-year fixed
• Principal & interest: $3,736/month
• Add property taxes and insurance (about $346/month): $4,082/month total

At first glance, renting wins. You'd pay $3,400 to rent versus $4,082 to own — about $680 less every month. If you only look at month one, renting is the obvious call.

But almost nobody rents for just one month. Let's look at how this plays out over five years.

Rent Doesn't Sit Still

Salt Lake is one of the tightest rental markets in the country, and the data shows it. According to the Kem C. Gardner Policy Institute's analysis of the Salt Lake apartment market, average rents in Salt Lake County rose 78% from 2000 to 2018 — an average of about 3.3% per year. But it accelerated: from 2010 to 2018, rents climbed 49%, an average of 5.1% per year, and from 2013 to 2018 the pace hit 6.1% per year. Vacancy has stayed below 5% the entire time, and rent increases have outpaced both inflation and income growth.

So a flat rent is a fantasy. Let's use a conservative 5% per year — roughly the recent-decade pace, and below the hottest stretch. Starting at $3,400 today, here's what that same rental costs you:

By year five you're paying $4,133/month — and heading into year six, closer to $4,339/month. Notice what happened: the rent has quietly passed the buyer's $4,082 payment. The renter's cost keeps climbing; the buyer's principal-and-interest payment is fixed for 30 years and never moves.

Over the full five years, renting this house costs about $225,000 — and at the end of it, you own nothing.

What the Buyer Gets That the Renter Doesn't

The buyer's payment stays flat, but that's not the real advantage. The real advantage is that every month the buyer is building equity in two ways at once.

Appreciation. Every major forecaster expects home prices to keep rising over the next five years — just more slowly than the pandemic frenzy. Fannie Mae's forecast panel and outlets like U.S. News put national appreciation in the range of 2–4% per year through 2030 (roughly 15% cumulative). Salt Lake has historically run ahead of the national average, but let's stay conservative and use 3% per year.

At 3% annual growth, that $720,000 house is worth about $834,700 in five years — an appreciation gain of roughly $114,700. That gain effectively offsets a large chunk of what you're paying to own. Put another way: the house is quietly "paying you back" about $1,900 a month in added value, which more than covers the ~$680 gap between renting and owning.

Principal paydown. On top of appreciation, part of every mortgage payment goes toward the loan itself. Over five years you'd pay down about $35,300 of the balance — money that moves from the bank's column into yours.

Adding It Up: Buying vs. Renting Over Five Years

Here's the head-to-head after five years:

Yes, the buyer puts out more cash — about $389,000 versus $225,000, including that $144,000 down payment. But the buyer ends the five years holding roughly $294,000 in equity, while the renter holds nothing.

Net it out. The renter's $225,000 is simply gone. For the buyer, subtract the $294,000 of equity they now own from their total cash out, and their true five-year cost of owning is only about $95,000. Even after folding in realistic homeowner maintenance (roughly 1% of the home's value per year, about $36,000 over five years), the buyer's net cost lands around $131,000.

Either way, buying comes out somewhere between $95,000 and $130,000 ahead of renting over five years — and that's using a conservative 3% appreciation estimate. At 4%, closer to Salt Lake's historical norm, the buyer's equity grows to about $335,000 and the gap widens further.

A Few Honest Caveats

The math above is a strong case for buying, but it isn't a guarantee, and I'd rather you see the whole picture:

• Selling has costs. If you sold at year five, agent commissions and closing costs (~6%) would take a bite out of that equity. But if you stay put — which most owners do — you never pay it, and every additional year deepens the advantage.
• Rates can change. Today's 6.75% isn't forever. If rates fall, you can refinance and lower that fixed payment — an option renters simply don't have. Rent, meanwhile, only moves one direction.
• The down payment has an opportunity cost. That $144,000 could be invested elsewhere. But few renters actually invest the difference, and none of it protects them from rising rent.
• Owning comes with maintenance and repairs that a renter doesn't pay. I built a conservative estimate for that into the numbers above.

So — Is It Too Late?

I don't think so. The renters in my units felt priced out in 2021, and if they'd bought then, they'd be sitting on six figures of equity and a 2% rate today. Five years from now, I suspect we'll be saying the same thing about 2026.

The uncomfortable truth about waiting for a "better time" is that in a market like Salt Lake — tight inventory, relentless rent growth, steady appreciation — the cost of waiting usually shows up as a higher price and a higher rent. Buying isn't right for everyone or every situation. But if you can put together the down payment and plan to stay a few years, the numbers make a case that's hard to ignore.

If you're trying to figure out whether buying makes sense for your situation, that's exactly what I help with. And if you're new to all this, my step-by-step guide to the Utah home buying process walks through what to expect. When you're ready, reach out through SLC Agent Match and I'll connect you with an agent who can run these numbers on a real house you're actually considering.

Sources: Kem C. Gardner Policy Institute, "The Salt Lake Apartment Market" (June 2019); Salt Lake County median price data via WFRMLS; 5-year appreciation forecasts via U.S. News and the Fannie Mae Home Price Expectations Survey. Mortgage, rent, and equity figures are illustrative estimates based on the assumptions stated above.