Utah rental market softens, but for how long?

SALT LAKE CITY —After years of skyrocketing rent prices, the market in Utah is softening a little.

That’s thanks to a lot of new units currently hitting the market, prompting some landlords to offer more incentives to new tenants.

But with a slowdown in new construction right now due to higher interest rates, this small measure of relief is not expected to last forever.

A different market

In Salt Lake City’s Ballpark neighborhood, Rick Butterfield shows off the latest place to live.

“Brand new, just completed,” said Butterfield, who is co-owner of West Temple Townhomes. The three-story units on the corner of West Temple and 1700 South are designed with working professionals in mind.

But Butterfield is finding this market is a little different than it has been.

“Right now, there’s so many things available to rent,” he said.

That’s why Butterfield is now offering an incentive – one-month free rent for new tenants. The goal, he said, is “to get people in and get them to be here.”

He’s not the only landlord offering a concession like that.

“You’re seeing that competition for tenants increase,” said Gavin Gilbert, staff attorney and government relations director at the Rental Housing Association of Utah.

Gilbert said the market in Utah is definitely softening.

“For a large period, we saw home prices and rental prices skyrocket,” Gilbert said. “We’re seeing that level off.”

Increase in new supply

Why is Utah’s market softening? Two words – new construction.

“There’s now more apartments available than people looking for apartments,” said Dejan Eskic, a housing analyst at the Kem C. Gardner Policy Institute at the University of Utah.

Eskic said that new supply has pushed asking rent prices down around 2.5-3.5% since January, prompting more landlords to offer incentives.

Although, Eskic noted, rent is still high in Utah — fueled by several years of astronomical price increases. He also said any relief in the market right now will likely be temporary. That’s because there isn’t a lot of new building going on due to high interest rates, Eskic said, and demand will eventually catch back up.

“We’ll see rents go back up come probably late 2026, early 2027,” he said.

For now, Butterfield said that month of free rent is helping fuel momentum as he tries to fill his buildings all the way up.

“It’s just a matter of finding the right people who want to make it home,” he said.