What’s Next in Utah Housing? 2026 Forecast & Market Insights

This year, Utah’s top minds in real estate, economics, and development gathered for the Rimrock Economic Summit. The event brought together some of the state’s most respected industry leaders to share insights, data, and forecasts shaping Utah’s economy and housing market heading into 2026. From construction costs and interest rates to population growth and housing affordability, the conversation painted a clear picture of where Utah stands and where it’s headed next. Below is a list of the panel members from this Summit.

- Phil Dean – Chief Economist and Public Finance Senior Research Fellow, Kem C. Gardner Policy Institute

- Mark Hampton – Co-Founder, Rimrock Construction, with over 40 years of experience in the construction industry

-Dallas Hakes – Mayor of Mapleton and Owner-Operator of Lonestar Builders, a commercial development and construction firm

- Tom Henriod – CEO of Rockworth Companies, with over $2 billion managed in real estate transactions.

“We’ve been oversold by ‘rosey’ economics in Utah for the past 10 years. It will take until the beginning of 2027 to burn through (absorption) the excess rental supply.”  -Tom Henroid

How can that be when the Kem C. Gardner institute continues to says we’re 37,000 households short? "The disconnect is that we built the wrong product — we didn’t build affordable housing, especially downtown.” -Phil Dean

“So if that housing shortage number of 37,000 households, that’s been the same for nearly 20 years, doesn’t change irregardless of the market, why even track it? It’s just a dumb number!” -Dallas Hakes

These stark statements from Utah’s top economists and development leaders set the tone for what’s ahead. As we head into 2026, the question isn’t if the housing market will shift — it’s when and how. Below, we break down the most important insights from the recent Rimrock Economic Summit, and what they mean for Utah’s real estate landscape in the year ahead.

Setting the Stage: Utah’s Economic Crystal Ball

The discussion offered a frank look ahead at Utah’s economy, housing market, and construction landscape for 2026 and beyond. Here are the most relevant takeaways you can use to shape expectations and messaging for 2026:

A. Absorption & Concessions Will Tell the Tale

• The panel agreed: the metrics to watch most are rate of absorption (how fast new units lease up) and concession reduction (especially on renewals).

• When concessions fade and vacancy windows shrink toward normal levels, we’ll know the oversupply issue is receding.

B. Construction Costs: Stabilized but not collapsing

• Over the past year, cost inflation has cooled. Some panelists saw flat or even slight decreases in project re-pricing.

• Manpower availability is improving, which helps offset cost pressures.

• But even with some easing, the interest reserve burden on construction debt remains high and still constrains profitability.

C. Lending & Equity: A slow thaw

• Over recent years, developers have struggled with tight debt and scarce equity. That may begin to relax—but not dramatically.

• Equity investors demand higher returns to compete with other asset classes, so deal underwriting will stay rigorous.

D. Interest Rates & Lock-In Effect

• The panel didn’t foresee big rate cuts. Rather, modest moderation (e.g. a half-point) might be more realistic.

• That said, a major drag on movement is the interest rate lock-in effect—owners with very low mortgage rates are reluctant to trade up, reducing churn in the market.

E. Timing: When Will the Supply Balance Shift?

• The consensus: late 2027 is when excess supply may mostly burn off, concessions fade, and new fundamentals surface.

• But 2026 is a transition year—still soft in some corners, but with early signs of stabilization in others.

Utah’s “Magnificent Seven” vs. “Troubling Seven”

The Kem C. Gardner Policy Institute outlined Utah’s core strengths and its most pressing challenges. While our economic engine remains strong, housing affordability sits at the top of the state’s concerns.

For the real-estate and construction industry, the #1 issue — housing affordability — is driving nearly every other economic conversation in the state.

2025–2026 Economic Forecast Highlights

According to the Kem C. Gardner Policy Institute, Utah is still on a growth path — but it’s moderating:

• Personal Income Growth: 5.0% (2025) → 4.8% (2026)

• Population Growth: 1.3% per year through 2026

• Unemployment Rate: Rising slightly from 3.3% to 3.5%

• Non-Agricultural Employment: Up 1.8% each year

These numbers suggest a soft-landing scenario — a stable economy without major recession, but slower momentum than Utah experienced from 2015–2022.

Construction Costs and Affordability: The Heart of the Conversation

Panelists agreed that Utah’s core housing challenge isn’t just supply — it’s the type of supply.

Developers overbuilt high-end multifamily and luxury rental units that don’t match the needs of Utah’s entry-level buyers and young households. The discussion pointed toward a return to simpler, cost-effective construction: “linoleum and formica instead of granite and quartz.”

Affordability will come from:

• Smaller units (two-bedroom, one-bath layouts)

• Increased density to reduce land cost per unit

• Streamlined materials and construction methods

• Municipal flexibility on zoning and design standards

As Henriod noted, “Developers want to make it nicer, but nice costs money. We need cities willing to accept ‘nice enough’ if we’re going to solve affordability.”

Lending, Rates & Market Timing

• Financing is tight: equity demands higher returns, and lenders are cautious.

• Interest rates are stabilizing — panelists expect only modest drops (≈ 0.5%).

• Absorption rates and concessions remain the key metrics to watch through 2026.

• Expect stronger recovery by early 2027 as oversupply finally burns off.

“We built too much of one product type. We’ll get through it — Utah still has a super-bright future.” – Mark Hampton

Demographic Shift: Utah’s Fertility Decline

One of the most eye-opening slides came from the Kem C. Gardner Policy Institute — titled “Sweet Child O’ Mine.” Utah’s fertility rate has fallen from 3.27 in 1970 to just 1.80 today — well below replacement level.

This decline affects long-term housing demand, workforce growth, and economic sustainability. Younger Utahns are delaying family formation, often citing housing cost as a primary factor — connecting directly back to the state’s #1 “troubling” issue.

What It Means for Utah Real Estate Heading into 2026

1. Expect a Transitional Year: 2026 will be marked by stabilization, not rapid growth.

2. Affordability is the North Star: Builders and developers that deliver attainable products will see the strongest absorption.

3. Watch Absorption & Concessions: As those metrics normalize, momentum will return.

4. Don’t Wait to Build: Panelists emphasized that starting projects now positions developers for the 2027 upswing.

5. Utah Remains a National Bright Spot: With massive projects like The Point and Texas Instruments expansion underway, long-term confidence in the state remains high.
   
   

   Role	Key Focus For 2026	Messaging You Should Lean On
   Developers / Builders	Design for cost efficiency, smaller unit footprints, higher density to make basic units viable	We need more 2-bed/1-bath, efficient units—less granite, more linoleum. Let’s build to what people can actually afford.”
   Investors	Scrutinize absorption curves, underwrite with cushion, prefer projects that can survive slower leasing	“We’re not banking on 100% lease-up in 12 months; we’re modeling for 18–24 months and conservative concessions.”
   Real Estate Agents	Guide clients toward realistic expectations, lower-tier inventory, and taking advantage of transitional pricing	“You still get upside in 2026, but you’ll win by spotting the undervalued or entry-level deals now.”

In Summary

Utah’s story heading into 2026 is one of balance and correction. After a decade of “rosey economics,” experts agree it’s time to refocus on affordability, realistic growth, and sustainable development. Construction costs are steady, financing is gradually loosening, and demand remains strong — it’s simply a matter of building the right product for the right price point.