The reason for high rents can be explained both with the millennials, as well as the baby boomers: the former are looking for jobs in the metro area and like the flexibility, the latter are looking to downsize and live more conveniently.
Apartment rents have been up 5% in most metro-area cities since 2014. In the Denver south-metro area a one bedroom apartment will rent for $1,000 on average, a two bedroom for $1,500 or more.
According to the Metro Denver Economic Development Corp. the vacancy rate in the Denver metro area has been 4.5%. The national average lies at 7%.
Zillow predicts that rents are still on the rise which is bad news for renters who on average spend 305 of their income on rent while homeowners only spend 15% on mortgage payments.
Millenials are still not convinced to buy – at least not yet. While 74% plan to eventually buy a home, 53% of them want to wait until after 2018. This can be explained with higher student debt and later marriage.
It will be a couple years until the rent rates will adjust to income rates in the Denver metro area.