Denver rent increases for single-family homes is slowing

Denver rent increases for single-family homes is slowing

  13 Nov 2018

Average rents on single-family homes in metro Denver barely budged during the third quarter and are moving lower in many parts of the state, according to a report Monday from Real Property Management Colorado and RentRange.

“Rental rates across the Denver metro area continue to rise although the gains are more modest than we’ve seen in some time,” said Greg Bacheller, co-owner of Real Property Management Colorado.

The average monthly rent on a three-bedroom home in metro Denver was $2,124, only slightly above the $2,106 commanded in the third quarter of 2017. Statewide, the average monthly rent for that type of home was $1,775, down from $1,814 a year ago. Nationally, the average rent on a three-bedroom home was $1,483 in the third quarter, down from $1,521 a year earlier.

Bacheller said the 0.85 percent pace of annual rent gains in metro Denver is down from prior quarters. Home rents were rising 2.5 percent annually in the second quarter, 2.15 percent in the first, 4.11 percent in the fourth quarter of 2017 and 3.2 percent in the third quarter of 2017.

Bacheller notes that all the new apartment supply could be diverting some tenants who might have otherwise gone into existing homes. Declining home rents in Denver tend to line up with where the most new apartments are coming online.

A relative lack of affordability is making the region less attractive, and net migration to the state is slowing, meaning a smaller pool of new tenants. Metro Denver home rents are about a third more expensive than the nation as a whole, but incomes aren’t a third higher.

To that list, he adds a new restraint on rent increases. As the housing market cools, some sellers who can’t get the price they want are starting to rent their homes, he said.

“That is also driving up supply,” Bacheller said.

The report is based on 1,500 properties managed by Real Property Management Colorado and replaces a survey from the University of Denver that was discontinued.

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