Salt Lake City Leads Nation in Rent vs. Buy Cost Gap

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Utah Market Data

> Multi-Unit (2+ Units) - Sold Listings & Median Price Per Sq Ft

• Sold Multi-Unit Listings are down 4.76% YTD going from 126 last year to 120 this year.

• Median Price Per Sq Ft for Multi-Unit Listings is down 2.49% going from 253 last year to 247 this year.

> Single Family Home - Sold Listings & Median Price Per Sq Ft

• Sold Single Family Listings are down 5.29% YTD going from 9,646 last year to 9,136 this year.

• Median Price Per Sq Ft for Single Family Listings is up 1.69% YTD going from 229 last year to 233 this year.

Rates & Financing

> Mortgage Rates as of 4/16/2025

Headlines & Insights

FEATURED

Homeownership Gap Widens - Especially in Salt Lake City: Buyers Now Need $50K+ More Than Renters

The income needed to buy a typical U.S. home has climbed to $117,000—over $50,000 more than what’s required to rent. The gap between buying and renting is growing, especially in high-cost areas, as home prices and mortgage rates remain elevated.

Main takeaways:

• Buyers now need 81.8% more income than renters—up from 73% last year and just 17% in 2021.

• The biggest increases in the income gap were seen in Salt Lake City (+28 percentage points), Austin, and San Diego, where rents dropped but home prices continued to climb.

• The median U.S. home price rose 4.5% to $423,892, while rents held relatively flat at $1,604 due to a supply boost from new apartment construction.

What this means for Utah investors:
Salt Lake City’s sharp 28-point jump in the rent-vs-buy income gap highlights growing affordability challenges for local buyers. As rents fall and home prices rise, more residents may be pushed to remain renters longer, strengthening rental demand. This creates potential opportunities for investors to acquire and hold rental assets—especially in markets like Salt Lake City where the fundamentals increasingly favor long-term rentership.

NATIONAL

Tariffs Stall Builder Sentiment – Spring Housing Season Starts Slow
Builder confidence remains low at 40 in April as tariff-driven material cost hikes, labor shortages, and policy uncertainty weigh on the market. Despite a brief mortgage rate dip and some uptick in buyer traffic, 60% of builders report rising costs due to tariffs—averaging $10,900 per home—and are increasingly relying on incentives and price cuts to stimulate demand.

Buyers Turn to Riskier Loans as Rates Jump –
As mortgage rates surged to 6.81%, homebuyers pulled back from purchases and flocked to adjustable-rate mortgages (ARMs), which saw their highest share in over two years. Despite increased housing inventory, overall mortgage applications dropped 8.5% as tariff-driven volatility and economic uncertainty made fixed-rate loans less attractive and pushed buyers toward lower initial monthly payments.

Tariff Turmoil Spooks Builders Despite Exemptions –
Even with exemptions and a 90-day delay, new U.S. tariffs are already pushing up building material costs and sowing uncertainty in the housing market. NAHB surveys reveal suppliers have preemptively raised prices by 5.5%–6.9%, as ongoing trade negotiations and unclear long-term policy leave builders and buyers alike hesitant to move forward.

Occupancy Still Lags in Most Apartment Markets –
Despite national apartment occupancy stabilizing at 95% in Q1 2025, most major markets remain below their pre-pandemic norms. Sun Belt cities like Fort Worth, Austin, and Orlando saw the steepest drops, while Midwest and Northeast metros—especially Indianapolis, Chicago, and New York—outperformed their 2015–2019 averages.

Multifamily Overbuild Pays Off –
Multifamily developers who delivered during the 2023–2024 building boom are now reaping the benefits, as looming tariffs and construction slowdowns tighten future supply. With mortgage rates high and homeownership costing 30% more than renting, landlords expect rents to rise up to 5% annually, turning yesterday’s oversupply into today’s competitive edge.

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