Salt Lake Apartment Construction Falls 50% as Rents Rise for the First Time in Two Years

Average rent in Salt Lake County was $1,675 per month in Q2, up 0.7% ($12) from a year ago. The gain is small, but it is the first yearly increase since 2024. Rents fell 5.9% last year and are still about 5% below the 2024 peak of $1,768. The data comes from Wadsworth's second-quarter survey of 76,810 apartment units in the county.

Total vacancy fell to 7.5% from 8.4% a year ago. But among stabilized buildings (buildings done filling up after construction), vacancy rose to 5.0% from 4.7%. The improvement is coming from new buildings filling up, not from older buildings getting tighter.

Landlords are also still giving away free rent to fill units. The average concession is 1.1 months of free rent, nearly double a year ago. Downtown is the weakest area, with 13.0% vacancy and 2.1 months of free rent. Older buildings are in much better shape. Buildings from before 2000 have 3.6% vacancy and give away about three weeks of free rent.

New construction explains why this should hold. Builders finished 8,844 units in 2024 and 7,436 in 2025. This year they are expected to finish 3,678, a 50% drop. Another 7,600 units are under construction, and 4,600 more are in planning. So the relief will come slowly, but the building boom has peaked.

Salt Lake County added 15,097 jobs over the past year, a 1.8% gain. Job growth nationally was 0.3%. Wages rose 4.3%, and unemployment is 3.6%.

Buying a home is also out of reach for many renters. Owning the median $570,000 home costs about $4,271 a month with the mortgage, taxes, insurance, and upkeep. The average renter pays about $2,120. Owning costs twice as much as renting, so many people keep renting.

If you own apartments in Salt Lake County, the worst of the rent decline looks like it is behind you. Plan for flat rents and free-rent deals through 2026. Real rent growth is more likely in 2027.

If you want to buy, the next 12 to 24 months could be an optimal window. Sellers are still feeling the pinch on rents and that will help you negotiate. Underwrite flat rents for year one, and be careful with any deal that only works if rents jump.

If you plan to sell in the next year, this report helps you. Stable rents and less new construction on the horizon will make it easier for a buyer to say yes. But price the property on today's income. An improving market will not save an overpriced listing.

The Salt Lake apartment slump is winding down. Rents rose for the first time in two years. Vacancy is down from its peak, and new construction is half of last year's level. We will watch free-rent deals next, because owners are still giving away an average of 1.1 months to keep units full. Next week we cover the Q2 sales numbers for the rest of the Utah market.

_{Data sourced from Wadsworth Multifamily Research, Salt Lake County Market Trends Q2 2026.}

Mortgage rates moved back up this week. The average 30-year fixed is 6.63%, up 0.03% from last week and about flat over the past month. Rates are still about 0.16% lower than a year ago. Adjustable loans are cheaper. The 7/6 ARM is at 6.32%, about a third of a point below the 30-year fixed. An ARM, or adjustable-rate mortgage, holds a fixed rate for a set number of years and can then move up or down.

The 10-year Treasury yield, which mortgage rates tend to follow, rose to about 4.54% this week as oil prices climbed. Higher oil prices push inflation up, and bond yields rise when investors expect more inflation. Some of this week's rate bump should fade if oil prices settle down. A long stretch of high oil prices would likely keep mortgage rates up.

Utah Headlines

Salt Lake City's New Short-Term Rental Rules Take Effect, With a $1,000-a-Week Fine for Unlicensed Operators — Starting July 1, Salt Lake City requires a business license ($198 per year plus $342 per unit) for every Airbnb-style rental, caps stays at 200 nights per year, and limits larger buildings to 10% of units as short-term rentals.

137 Rental Units Will Replace a State Street Strip Mall as Lincoln Village Files for Demolition — Developers filed permits to tear down the former Lincoln Plaza at 145 E. 1300 South as early as July 13, clearing the way for 42 apartments and 95 for-rent townhomes.

22 For-Sale Townhomes Cleared for a Former LDS Church Site in Liberty Wells — The Wells on 5th project won approval from the Salt Lake City Planning Commission for 22 owner-occupied townhomes along 500 East, in a part of the city where most new construction has been rental.

National Headlines

U.S. Apartment Demand Strengthens as New Supply Falls Below Normal for the First Time in Three Years — Renters filled a net 187,000 apartment units in Q2 while yearly new supply fell to 340,200 units, down from a peak near 588,000 in late 2024, pushing occupancy up to 95.5%.

America's Ten Biggest Builders Lost Ground in 2025, Slipping to 43.6% of New Home Sales — The top ten builders closed 295,959 of the 679,083 new single-family homes sold last year, down 1.2 percentage points from their record 44.8% share in 2024, while D.R. Horton stayed number one for the 24th straight year.

Employers Added Just 57,000 Jobs in June, Cooling the Odds of a July Fed Rate Hike — The gain was about half of what economists expected, and it cut the odds of a July rate hike from 28.9% to 19.8%. Leisure and hospitality lost 61,000 jobs, and that sector employs a large share of renters.

A $400 Million Multifamily Fund Is Returning Zero to Its Investors — Dallas-based S2 Capital is shutting down its $400 million fund without returning any money to investors, the latest sign of trouble in Sun Belt apartment deals bought at 2022 prices.

Late Payments on Apartment Loans Rise Even as Other Commercial Mortgages Improve — Trepp reports late payments on CMBS loans (commercial mortgages bundled into bonds) fell 20 basis points to 7.35% in June, but multifamily moved the other way, rising 28 bps to 7.23% as loans coming due struggle to refinance.

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David Robinson - Principal Broker | Investor