The high cost of buying a home in Utah is driving up the price of rental housing as fewer people are able to qualify for mortgages, increasing the demand for rentals, real-estate analysts say.

The midyear 2007 Greater Salt Lake Multi-Family report released by Apartment Realty Advisors indicates the vacancy rate for available rental units in Salt Lake County is just 4.1 percent. The percentage of people choosing to lease apartments has also increased 6.7 percent over the past 12 months.

Meanwhile, the price of an average home in Salt Lake County has gone from $250,698 in 2006 to $274,004 so far this year, an increase of 9.3 percent. Those rises in housing prices have created a bleak picture for renters who are finding themselves being pushed out of the entry-level homeownership market.

With the pool of people seeking rental housing growing rapidly, property owners are using that leverage to their advantage, said Jed Milburn, an ARA executive.

"Instead of having property owners offer concessions, which they used to do, it was kind of like, 'Hey, come move in, and we'll give you a couple hundred dollars off your rent,' now they can be a lot more particular about who they approve as a qualified resident. They're becoming a lot more stringent on what credit scores they allow on their properties," he said. "There's so many more renters now chasing apartments that landlords are in a really strong position." In 2006, 25.3 percent of landlords along the Wasatch Front offered concessions or incentives to lure renters. In 2007, only 7.5 percent of property owners offered rental concessions.

The amount people are paying to rent is also rising. The average rent paid in Salt Lake, Utah, Davis, and Weber counties has jumped from $644 in midyear 2006 to $683 in midyear 2007, an increase of about 4 percent. Renters pay 83 cents per square foot to live in Salt Lake County, the highest amount among the four Wasatch Front counties, while Weber County has the cheapest rent per square foot, at 68 cents.

Milburn said the recent spate of subprime lending is at least partly to blame for the change in the rental housing landscape.

"If you look at a lot of the renters who rent two- and three-bedroom units, they are also the entry-level homebuyer, or they used to be, or they could be. Now they can't qualify for a loan, and that definitely impacts the multifamily market," he said.

"The owners of investment properties are in a very strong position as opposed to the entry-level homebuyers," he added. "You've got one dynamic pulling in one direction and another dynamic pulling in the other direction. Essentially, one is going well, and the other is not."

The trend in Utah mirrors the rental market across the West, where rents are rising to some of the highest levels in many years. A California research firm, RealFacts, notes rent increases of 9.9 percent in Seattle and 11 percent in Santa Clara County, Calif., from June 2006 to June 2007.

Salt Lake City had rent increases of 6.8 percent during the period and was one of nine metro areas in the West with rent increases of at least 5 percent.

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E-mail: jlee@desnews.com