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» SLC Rents Down 1.3% YOY - National Multifamily Market Overview:

• Rent Growth: U.S. multifamily rents held steady in February, with the national average rising by $1 to $1,751. However, year-over-year rent growth remained at 1.2%. Multifamily rent growth has been highly regional, with some metros experiencing growth while others see declines due to high supply.

• High-Supply Markets: In metros with high levels of new supply, such as Austin and Denver, rent growth is negative due to the challenges of absorbing newly added units. These markets are experiencing increased competition for rental units.

Utah Specific Insights:

• Salt Lake City: Advertised rent growth in Salt Lake City was negative, with rents decreasing by 1.2% year-over-year. Both the lifestyle and renter-by-necessity sectors saw declines, with the respective changes being -1.0% and -1.6%.

  

• Single-Family Build-to-Rent: Salt Lake City experienced a 0.7% year-over-year growth in single-family rental occupancy, although the rent growth in this sector was lower than in some other regions.

Market Outlook for 2025:

• Supply and Demand: While supply growth is expected to decelerate nationally, high-supply markets like Salt Lake City will benefit from fewer new deliveries, helping the market absorb excess units. However, weaker demand could increase the time needed to absorb these new units, potentially putting pressure on properties still in lease-up phases.

Forecasts for Rent Growth: Matrix forecasts lower multifamily deliveries in 2025 (525,000 units) compared to 2024. The durability of demand will be key for market performance, especially in markets like Salt Lake City, which are currently facing negative rent growth.

What This Means for Investors:

For investors in Utah, especially those focused on Salt Lake City, it’s important to note the current downward pressure on rents and occupancy. With negative rent growth reported in the region, the key will be to monitor the absorption of new supply and how the market adapts in the face of weaker demand. Fewer new deliveries in 2025 may help alleviate some of the supply glut, but the pace of rent recovery could be slower than expected.

This environment may present opportunities in stabilized properties or in markets that are better positioned to absorb new units over time. Investors should focus on markets with strong job growth and low vacancy rates to ensure better returns in the coming years. Be mindful of the evolving supply dynamics as the market works to digest the excess inventory, which may present opportunities for strategic acquisitions at favorable prices.

More News & Reports

Utah

Ogden Rejects Homeless Facility, Prioritizes Neighborhood Revitalization – Ogden leaders voted to buy and redevelop the Aspen Care Center site into housing instead of allowing a homeless facility. The decision forces Weber Housing Authority to find a new site outside the city, amid concerns that Ogden carries too much of Weber County’s homelessness burden.

Switchpoint Expands Affordable Housing in St. George – Switchpoint Community Resource Center broke ground on a $25 million expansion, adding 66 new apartments to its affordable housing project, The Point. The development will provide 110 units for homeless individuals, including older adults and veterans, emphasizing stability and community support.

Utah Targets Illegal Short-Term Rentals – Lawmakers advanced a bill allowing local officials to use Airbnb and Vrbo listings as evidence to enforce regulations, provided they have additional proof. Supporters argue it balances property rights, local control, and housing affordability, especially in tourism-heavy areas where short-term rentals reduce available housing.

National

Housing Affordability Improves Despite High Mortgage Rates – The national rent-to-income ratio dropped for the fifth consecutive quarter to 27.4%, as income growth outpaced rent increases. Higher housing inventory and strong wages are providing first-time buyers with more options, even amid elevated mortgage rates. Zillow forecasts a modest 0.9% rise in home values for 2025, signaling a cooling market. However, potential policy shifts, including tariffs on construction materials, could disrupt new home supply and push prices higher in the coming years.

Multifamily Market Faces Pressure from Tariffs and Federal Layoffs – Rent growth is slowing in high-supply markets as federal job cuts and declining immigration weaken demand. While the national advertised rent rose slightly to $1,751, Sunbelt metros like Austin, Phoenix, and Atlanta saw declines. High-supply markets struggle to absorb new units, with occupancy dropping in cities like Denver and Dallas. A decline in multifamily starts is expected to ease oversupply, but reduced demand could extend lease-up periods and pressure rents further.

Fed Expected to Cut Rates Twice in 2025 – Economists predict the Federal Reserve will lower interest rates in September and December, despite ongoing inflation concerns. The benchmark rate could drop to 3.75%-4%, but uncertainty surrounding tariffs and economic growth complicates the outlook. While 74% of surveyed economists expect weaker economic growth, 66% foresee higher inflation, raising questions about the Fed’s ability to balance rate cuts with price stability.

Homeownership Costs Surge 79% in Five Years – The annual income needed to buy a typical U.S. home has jumped from $51,646 in 2020 to $92,538 in 2025, a 79% increase, according to Zillow. Home prices remain 44% higher than in 2019, while wages have only grown 25%, fueling an affordability crisis. Higher mortgage rates and stagnant income growth have led to constrained home sales, with many homeowners unwilling or unable to move.

Lower Mortgage Rates Expected to Energize Housing Market – February saw slower-than-expected buyer and seller activity, but declining mortgage rates could bring them back in March. With 1.04 million homes on the market—the highest February inventory since 2020—buyers have more options, and competition has eased. Home values are up just 2.1% year-over-year, the slowest growth in 18 months, while homes are taking longer to go under contract. Zillow expects lower rates to spur activity, though economic uncertainty may temper enthusiasm in some regions.

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