2024 set to have historic apartment construction amid rising rental costs

Nearly everywhere in the United States has seen an increase in apartment renting prices in the last year. A recent national rent report by Zumper found that, on a national level, one-bedroom apartments have gone up 1.6% to $1,534, while two-bedrooms rose 2.7% to $1,915.
Salt Lake City was ranked the country’s 47th most expensive rental market. In the last year, the price of a one-bedroom rental increased by 12%, and the price of a two-bedroom increased by 19.4%.
Average rental costs in Salt Lake City:
As mortgage rates remain relatively high — the current 30-year fixed rate mortgage is 6.35% — and the demand for housing still outweighs the supply, prices are not soon expected to fall.
“In an era where the amount of new supply is shattering records, it’s remarkable to see vacancy rates holding steady this year,” Zumper CEO Anthemos Georgiades said in the report.
“Strong renter retention alongside our growing national rent index underscores the robust demand present in the U.S. market,” he added.
The U.S. is expected to see a 30% increase in apartment construction since 2022. This year alone, 518,108 rental units are set to be completed, making history as the only year to surpass the 500,000 mark, according to RentCafe. By 2028, 2 million apartments are expected to be built.
“Most markets won’t see the impact of rapidly falling starts translating to lower completion levels until the second half of 2025, and more likely in 2026,” Doug Ressler, senior research officer at Yardi Matrix, said, per the RentCafe report. “All said, this massive drawdown in starts across all regions sets the stage for a very different industry trajectory come 2026 and 2027.”
The Salt Lake City metro area is expected to see a slight decrease in rental properties by about 300 compared to last year, RentCafe told Deseret News in an email. However, by 2028, approximately 18,300 new units are expected to be completed, about 800 more than were added in the past five years.
Last week, Redfin reported the most significant decline in home sales (6.9%) in nearly a year, even though mortgage rates have seen a decline.
“I expect more buyers and sellers to jump into the market in a few months, once everyone has a better understanding of how the new NAR rules will play out in actual real-estate deals,” Fernanda Kriese, a Redfin Premier agent, said, per Redfin. “The election and the drop in mortgage rates are also delaying buyers; a lot of them are waiting on the sidelines until November, hoping to get a lower rate and maybe more homes to choose from.”