Denver’s average rent increased by 17% year-over-year to $2,700 per month, according to the latest monthly figures from the Seattle-based real estate firm Redfin.
The city’s average rent payment is now nearly $600 more than an average mortgage, assuming a homebuyer put down at least 5%, according to Redfin.
The firm’s data shows that average rents have increased across the country by nearly 21% over the last 12 months and now sit at $1,985 per month. For comparison, the average mortgage payment for homebuyers with a down payment of at least 5% has increased by just under 20% to $1,551.
“First inflation came for the for-sale housing market, and now it is coming for the rental market,” Redfin Chief Economist Daryl Fairweather said in a statement. “Many people have been priced out of the for-sale market and are looking to rent instead, but that demand is pushing up rents.”
The latest monthly market data from the Denver Metro Association of Realtors confirms Fairweather’s suspicions.
According to the December figures, housing inventory dropped by 65% on an annualized basis to a total of 252 homes listed for sale. Meanwhile, the number of homes sold decreased by more than 8% and the average number of days homes spend on the multiple listing service dropped by 21% to just 15 days.
Fairweather said many housing markets across the country are seeing similar trends. And this trend is being compounded by persistent inflation, which is only making it more expensive to build homes.
According to research by the Common Sense Institute, a free enterprise think tank in Colorado, inflation has caused housing costs in the Denver metro area to increase by 3.8% so far in 2021 compared to the 2.8% increase the metro area saw in 2019.
Fairweather said now is a good time for potential homebuyers to move to someplace that is more affordable.
“If you are looking to buy or rent now, there’s nowhere to hide from inflation when it comes to housing costs,” he said. “The good news is that the tight labor market means it’s a great time to move somewhere more affordable. Chances are good that no matter where you go, you’ll be able to find a new job relatively quickly.”
This article was originally posted on Denver’s average rent increased 17% year-over-year