Denver Metro Apartment Rents Are Rising Faster Than Overall Inflation
Renters continue to battle for a limited supply of apartments in the first quarter, driving rents up to double-digit rates over the past year, according to the Apartment’s latest “Denver Metro Apartment Vacancy and Rent Survey.” Association of Metro Denver.
Apartment rents in the Denver metro area averaged $1,765 per month in the first quarter, up 3.3% from the fourth quarter average and 14.4% from last quarter. last year, according to the survey conducted by Daniels College of Business and Colorado University of Denver. Associates in economic management.
In dollars, average rents increased by $56.94 in the quarter and $222.02 over the past year. The apartment vacancy rate remained at 4.3% in the first quarter, compared to the fourth quarter. A year ago, the vacancy rate was 5.5%.
“In metro Denver, we’re seeing an all-time high in demand for rental housing, and we don’t have enough units to meet that demand,” said Drew Hamrick, senior vice president of government affairs and general counsel. of the AAMD, in the report. “The key to housing affordability is housing supply.”
During the quarter, developers put 1,936 new apartments on the market, ie less than a third of the 6,282 non-standard apartments delivered in the fourth quarter. This brought the total number of apartments in metro Denver to 384,257.
Renters occupied 2,393 additional units in the first quarter, or 457 units more than those built. But this “absorption” rate is lower than last year, when 19,353 additional apartments were occupied.
Rent increases are lagging annual home price gains, which rose 22.3% in February in the Denver metro area, according to the S&P CoreLogic Case-Shiller Index of Denver. They are, however, outpacing headline consumer inflation, which was at an annual rate of 9.1% in March, said Ron Throupe, associate professor of real estate at Daniels College of Business and author of the report.
Demand for rental housing is expected to continue to grow as rising house prices and rising mortgage rates combine to make home and condo purchases even more inaccessible for renters. A Zillow study estimated that metro Denver homebuyers faced monthly payment costs 42.2% higher in March than they were a year earlier and 21% higher than in March. they weren’t at the end of last year.
“It creates changes for people who may have wanted to have a home but no longer can,” Throupe said. “This supports the demand for apartments. This is the next choice of what you can do.
Throupe expects the home buying and renting markets to slow significantly in the second half of the year after the spring surge passes.