Here’s how much Denver apartment rents rose in 1 year
DENVER — The average rent in the Denver metro area was $222 higher in April 2022 than April 2021, according to the first quarter Denver Metro Apartment Vacancy and Rent report from the University of Denver’s Daniels College of Business.
The year-over-year rent change in the Denver metro area was up 13% from $1,543.59 to $1,765.61, the report says.
The first quarter report also shows a rent increase of $56.94, up from $1,708.67 in the fourth quarter to $1,765.61 this quarter.
“This yearly rent change is just over a 13% increase for the year as of April 10, 2021,” said the report’s author Ron Throupe, associate professor of real estate at the Daniels College of Business. “They are consistent with the year over year change measured last quarter. These rent changes exceed reported consumer price index (CPI) changes, or any real estate related CPI index portion.”
In Q4 2021, Denver was below a 4% vacancy rate – historically rents have continued to increase while vacancy is below 6%.
A few thousand units should not have a significant impact on the vacancy rate. Since interest rates are rising, that turns off more people from buying homes and keeping them renting.
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The vacancy rate in the metro Denver apartment market showed no measurable change from last quarter, at 4.3%.
The report says the Denver area apartment market added 1,936 new units to the inventory in the first quarter, resulting in a total inventory of 384,257 units.
“These results are coming off last year 2021 where a record of 19,353 net units were absorbed,” Throupe said. “There is always a concern that new unit production will outpace demand, accented by the amount of visible growth on the Front Range over the last seven years. This phenomena has yet to occur as migration, job growth and limited homes for sale, has supported apartment demand.”
Mortgage rates increases accelerated to start 2022 and are now approximately 5.25% for a 30-year loan, compared to 3.25% at this time last year.
“This coupled with rising prices has heightened concern that housing affordability needs, which is always a concern for local governments, is about to overwhelm affordability programs,” said Throupe. “The mortgage rates rise coupled with the rising price of single-family homes, exemplifying inflationary pressures, is not expected to quickly subside. This inflationary period leaves no one untouched.”
Credit: Originally posted May 2, 2022 by Alexander Kirk at 9news.com.