As 2025 winds down, many buyers, sellers, and investors are asking the same question: What’s next for the Salt Lake City housing market? With interest rates, inventory, and local growth all in flux, it’s natural to wonder how 2026 might shape up. While nobody has a crystal ball, current trends provide us with a few solid clues about where SLC real estate is headed.
Interest Rates May Finally Ease
After several years of higher mortgage rates, some economists expect a gradual decrease as inflation stabilizes.
According to the SLC Homes 2nd Quarter 2025 Market Report, the 30-year mortgage rate was around 6.75%, at the end of the 2nd quarter 2025, and the Federal Reserve hadn’t yet cut the Federal Funds rate. Since then the 30-year mortgage rate has dropped to 6.34%, and the Federal Reserve has dropped the Federal Funds rate once, by 0.25%, on September 17th, 2025. The Federal Reserve meets next on October 28th and 29th and again in December, and more rate cuts are expected. Most major economists predict that rates may not drop below 6% through 2025—but 2026 could bring mild relief if inflation continues to ease.
Even a small reduction could bring more buyers back into the market and increase competition for well-priced homes.
Inventory Will Remain Tight—But Not as Tight as Before
Utah’s ongoing housing shortage continues to shape the market. However, inventory levels are showing signs of improvement.
As noted in the SLC Homes quarterly report, Salt Lake County currently has 2,069 homes for sale—the highest level in five years and a 37% increase year-over-year.
Expect established neighborhoods like Sugar House and The Avenues to remain competitive, while newer communities such as Daybreak, Herriman, and Saratoga Springs continue to offer more attainable options for buyers seeking value and newer construction.
Home Prices: Slower Growth, Not a Decline
The 2026 Salt Lake City housing market may shift toward more balanced pricing.
Recent data from SLC Homes indicate that the median price of a single-family home in Salt Lake County decreased slightly (–0.8%) between Q2 2024 and Q2 2025, from $625,000 to $620,000. Condo and townhome prices remained mostly stable, up just 0.5% year-over-year.
This flattening trend indicates that home values may see modest movement through late 2025 and into 2026—likely favoring buyers and promoting a healthier long-term market.
Affordability Will Stay in the Spotlight
Even with slower price growth, affordability will continue to be a challenge. KUER reports that Utah remains one of the most expensive housing markets in the country. Add in rising insurance costs and HOA fees, and many buyers are turning to condos, townhomes, and smaller single-family homes to stretch their budgets.
Lifestyle-Driven Moves Will Grow
Remote work, outdoor amenities, and community-oriented lifestyles continue to drive demand.
Neighborhoods near downtown and the University of Utah—known for walkability and access to recreation—remain highly desirable. Meanwhile, suburban communities with trails, parks, and social spaces are flourishing, reflecting a broader shift toward quality of life as a top buying factor.
Want to explore lifestyle-friendly areas? Browse Real Estate Near Salt Lake City Universities for a closer look at the best local options.
Investors Will Watch Closely
For investors, 2026 could be a pivotal year. Utah’s population growth and rental demand remain strong, maintaining positive long-term prospects. However, as The Salt Lake Tribune notes, market conditions are changing, and holding costs are rising. Smart investors will focus on well-located properties with strong rental potential and sustainable maintenance costs.
The 2026 housing market forecast for Salt Lake City points to a year of balance rather than extremes. Buyers may find more breathing room, sellers can still expect healthy demand, and affordability will continue to be a key topic. Whether you’re planning to buy, sell, or invest, staying informed and working with an experienced local agent will help you make the most of the year ahead.
Salt Lake City Real Estate: Your Partner in 2025
If you’re considering buying or selling a home in or around Salt Lake City, we’re here to help! Whether selling to move up, buying your first home, or relocating, we provide expert, data-backed guidance to help you navigate the market with confidence.
Contact Kevin Coyle today to discuss your real estate goals—or explore more insights on our SLC Homes Blog.
