MARKET SNAPSHOT
Development activity is slowing across the Salt Lake City metro as developers significantly reduce the pace of new project starts in 2024. As of early 2025, approximately 5,500 units are under construction, a stark decline from the nearly 12,000 units in the pipeline just two years ago. Examining the current pipeline, around 4,100 units are expected to deliver in 2025, a figure closely aligned with the metro’s 10-year historical average. This slower pace of completions is expected to better align with demand, serving as a stabilizing factor for occupancy rates. Most ongoing developments are concentrated in Downtown Salt Lake City, the West Salt Lake City submarket, and communities south of Downtown. The growing presence of tech companies in the southern metro area and Lehi, coupled with the potential expansion of the FrontRunner and TRAX transit systems, has created strong momentum for apartment development in the southern suburbs.
Salt Lake City’s pace of new supply has been gradually declining after peaking at 5,800 units in 2023. In 2024, new deliveries dropped to 5,000 units, with approximately 4,100 units expected in 2025—a level consistent with the metro’s 10-year historical average. On the demand side, renter activity closed 2024 on a strong note, with over 4,700 units absorbed on a net basis, significantly exceeding the long-term average of 3,318 units. Net absorption also outpaced new supply during the final quarter of the year, reflecting healthy demand dynamics.
This surge in demand was partially fueled by rapidly rising home prices in the Salt Lake City metro, which have kept many prospective buyers in the rental market. Looking ahead to 2025, net absorption is expected to moderate to approximately 3,800 units. However, as the supply-demand balance narrows, occupancy rates are projected to edge upward, reaching 92.4% by year-end 2025, signaling a steady recovery in the market’s fundamentals.
Year-over-year rent growth in Salt Lake City declined by 1.2% at the end of Q4 2024, marking the seventh consecutive quarter of annual decreases. This trend has been largely driven by supply-side pressures, as property owners offered significant concessions to lease up newly delivered units, while operators of stabilized properties focused on maintaining occupancy rather than aggressively pushing rents. However, the second half of 2024 showed early signs of recovery, with rents improving by 50 basis points quarter-over-quarter by year-end. This upward momentum is expected to continue into 2025.
With a more balanced pace of deliveries in 2025 that aligns better with the market’s capacity to absorb new units, rent growth is anticipated to turn positive by midyear, marking the first annual increase in two years. By the close of 2025, rents are forecast to grow by 2.5% year-over-year. Across the metro’s 14 submarkets, rent growth is projected to range from 2.5% to 3.5%, with a few exceptions. Holladay is expected to lead the market with a robust 5.0% increase, while Sugar House, which will see the addition of over 750 new units—expanding its inventory by nearly 18%—is forecast to experience the weakest growth at 1.0%, reflecting the impact of new supply on rent dynamics.
12-month period ending November 2024
The Salt Lake City metropolitan area is poised for a strong 2025, with unemployment projected to average a low 2.7% and the addition of 13,800 new jobs, representing a 1.7% increase in employment. The finance sector remains a key driver of local economic growth, bolstered by significant investments from major employers. CleanJoule plans to invest $150 million and create 100 high-paying jobs over the next decade, while Strider aims to add over 150 positions in the southern metro within five years.
In the multifamily market, a narrowing supply-demand gap is expected to support rent growth exceeding 3.0% by year-end 2025, with occupancy rates forecast to stabilize at 92.4%. These trends highlight the region’s robust economic and housing fundamentals, positioning Salt Lake City for sustained growth and resilience in the coming year.
