Tenants continue to battle over a limited supply of apartments in the first quarter, pushing up rents by double-digit rates over the past year, according to the latest Denver Metro Apartment Vacanc…
Renters occupied an additional 2,393 units in the first quarter or 457 more units than were built. But that pace of “absorption” is running below last year when 19,353 additional apartments were filled.
Rent increases lag behind the annual gains in home prices, which rose 22.3% in February in metro Denver, per the S&P CoreLogic Case-Shiller Index Denver. They are, however, outpacing overall consumer inflation, whichin March, said Ron Throupe, associate professor of real estate at the Daniels College of Business and an author of the report.
Demand for rental housing is expected to continue to grow as higher home prices and higher mortgage rates combine to put home and condo purchases further out of reach for renters. Ahomebuyers faced monthly home payment costs that were 42.2% higher in March than they were a year earlier, and 21% higher than they were at the end of last year.
“It does create some shifting for people who may have been wanting to get a home but no longer can,” Throupe said. “That does prop up the demand for apartment units. It is the next choice of what you can do.” Throupe predicts that both the home purchase and rental markets will slow significantly in the second half of the year after the spring surge passes.
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