- Salt Lake's housing market faces challenges with high prices and slower demand.
- Median sales prices rose to $550,000; sales per 1,000 people remain low.
- Grants and initiatives seek to support first-time homeowners trying to enter the market.
SALT LAKE CITY — Utah's capital city remains one of the 10 hottest markets heading into 2026, but one of the market's top researchers says it's not immune to challenges building up nationwide.
Residential sales in Salt Lake County remained relatively steady in 2025, dipping by 2.4% from 2024, which essentially matched the trends in 2024. The median sales price rose by almost 2% to $550,000, while the median day on market rose from 29 days to 36 days, all of which indicate a slowing in demand, according to James Wood, Ivory-Boyer Senior Fellow at the University of Utah Kem C. Gardner Policy Institute.
Wood was a featured speaker at a Salt Lake Board of Realtors housing forecast event on Wednesday, outlining current and projected trends in the market. What he's seeing right now is that housing prices have remained mostly firm, defying expectations from 2022, when the Federal Reserve increased interest rates to combat record inflation at the time.
"We only saw a 2.8% decline. There were some predictions that (we would see) as much as 25%, so the market really held its own," he said.
Mortgage rates are on the way down, but they're still much higher than record-low rates seen during the COVID-19 pandemic. With no significant change in costs, he expects prices to "struggle for a little while."
That likely impacted some reluctance among buyers and sellers.
Sales per 1,000 people returned to levels last seen since the Great Recession over a decade ago, the institute found. Prices will likely remain high for at least another year or 18 months before the market sees "much movement," which may continue to impact sales and people trying to get into the housing market, he added.
3 projected 'headwinds' and 'tailwinds' in Salt Lake's market
What doesn't help is that there are still signs of housing challenges heading into 2026. Wood warns of three key concerns that could factor into this year's market.
3 'headwinds' in the market
- The county is projected to add 27,000 new jobs, which is 1.5%, continuing a trend of the lowest level of job growth since the Great Recession. Midterm elections and global events add to market uncertainty.
- Utah's net migration is slowing, potentially because of rising costs. The number of people moving into the state accounted for 43% of the state's growth in 2025, the lowest percentage in four years, according to a Gardner Policy Institute report last month.
- Over 60% of mortgage holders still have rates below 4%, from before the 2022 interest rate increase. Many residents may not be looking to move because of the current rates. Thirty-year fixed-rate mortgage interest rates peaked at over 7% in 2025, per the federal home loan company Freddie Mac.
But it's not all bad news. Wood also sees three positive trends at the start of 2026.
3 'tailwinds' in the market
- Interest rates are expected to fall in 2026. Those 30-year rates dropped to 6.15% by the end of 2025, per Freddie Mac, and experts project the rates could slide below 6% again for the first time since 2022.
- This will be the fourth year of recovery, which is slowly getting the market back to where it should be.
- There are many young people eager to get into the market if they can. Younger homeowners accounted for approximately one-third of all mortgage holders last year.
There are efforts to help new homeowners, too. Other speakers touted grants and initiatives, like the American Dream Grant. The program offers a handful of $10,000 grants to lower-income households with credit scores above 640, from money collected by brokers.
That's on top of recent state government efforts to build more homes and help out first-time homeowners.
Not just a Salt Lake issue
Salt Lake used to be a haven for young homeowners, as compared to the rest of the nation, but that's changed over the first quarter of this century. The share of young households — ages 25 to 34 — dropped from over 50% in 2000 to 39% by 2024. The National rate also slid, but only from 45% to 40% during that time.
Yet, what Salt Lake is seeing isn't different than other localized markets, says Jessica Lautz, deputy chief economist and vice president of research for the National Association of Realtors.
Part of her job is spent traveling across the country to deliver market updates, and she's seen the same concerns everywhere she goes. The inventory of homes nationwide is up from the past few years, but it remains nowhere near the amount before the Great Recession, she points out. It's causing higher home costs with the higher interest rates, and less interest in buying and selling.
While soaring costs have produced massive appreciation value, including an average gain of $241,000 for Salt Lake homeowners from 2020 to 2025, that has also made it difficult for first-time homeowners.
Younger adults are more likely to rent as they enter the workforce, but higher rents hurt their ability to save, Lautz explains. Student loan debt and rising child care costs are also major factors for many young households.
The percentage of first-time buyers plummeted to 21% last year, the lowest since at least 1980, according to Realtor data. The median first-time homeowner is now approximately 40, about a decade older than historical averages, while 63 is now the median repeat buyer — much higher than past medians in the 30s.
"This is going to stall the housing market," she said. "We need these young buyers to come into the market for the health and vibrancy of the housing market, but they're struggling to get there."
She remains hopeful, though, that tactics to help younger adults will help increase first-time homeownership.
