Utah has nation’s highest median household income when adjusted for cost of living, new report says

SALT LAKE CITY (ABC4) — Utah has the highest median household income in the country when adjusted for differences in cost of living, according to a new study.

Utah’s median household income sits at $98,336, a number more than 25% higher than the national average of $77,719, according to a report released Thursday by the University of Utah’s

Kem C. Gardner Policy Institute.

On its surface, Utah has the eighth-highest median household income. However, after adjusting for regional cost of living — a step researchers say is necessary to get a full picture — Utah’s median household income is the highest in the nation, followed by Maryland, Massachusetts, and New Hampshire.

“States that rank high on median household income measures do not necessarily benefit from higher levels of purchasing power … When comparing median household incomes by state, cost of living differences should be considered,” researchers wrote in their report brief.

Utah’s high median household income

While the report was looking at data from 2023, researchers said Utah has had a high unadjusted median household income for more than a decade, with the state consistently ranking among the top third nationally.

In recent years, Utah has jumped in ranking largely due to “higher-than-average economic growth,” the report says.

Researchers believe Utah’s consistently high median household income is due in part to having the largest average household size and high labor force participation rates, meaning there is the possibility for more income earners in a household.

“We just have more workers per household, meaning there’s more income potential in our average household,” said Natalie Roney, research economist and lead author of the brief.

Phil Dean, chief economist at the institute, added that the recent economic growth is likely due in part to “Utah’s very strong fundamentals,” including a young, well-educated population, competitive fiscal policies, location at the crossroads of the West, and diverse economy.

Cost of living concerns

Roney addressed possible concerns with the cost of living analysis, saying, “Some people may be surprised to hear that Utah’s cost of living is lower than the nation because people readily think of housing and our housing costs are definitely above the national average.”

Roney explained that there are several components the Bureau of Economic Analysis looks at when considering regional price parity, or cost of living disparities, and Utah has a lower cost of living on all the other measures.

She also said the average household in Utah is not a new buyer — as about 70% of Utah households already purchased their home — making it so they are not directly impacted by current housing costs.

“You look at the average homeowner out there, and they’re not experiencing today’s high housing prices. For the most part, it’s renters and new buyers that are facing the really high prices,” added Phil Dean, chief economist at the institute. “So it’s kind of looking at that average Utahn rather than the marginal home buyer, which face very different situations.”

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