2025 Rental Market Predictions: What Denver Renters Should Expect

2024 Rental Market Predictions: What Denver Renters Should Expect

As we move into 2024, Denver renters are likely to experience significant changes in the rental market. With shifting economic factors, population growth, and ongoing demand for housing, the Mile-High City remains one of the most competitive rental markets in the U.S. For both current renters and those looking to move into Denver, understanding the market's trajectory will be crucial.

Here’s what renters in Denver should expect in 2024, based on the latest data and trends.

Rising Rental Prices Amidst Growing Demand

Denver’s rental prices have been climbing steadily for the past few years, and 2024 shows no sign of this trend slowing down. According to a Relocity Market Report, rental prices in Denver have increased by over 7% year-over-year, bringing the average rent in the city to $2,797. This marks a consistent rise in rental costs, primarily driven by the influx of new residents, job market growth, and increasing demand for luxury living options.

One of the primary drivers behind these rising prices is the city’s population growth. With over 100,000 new residentsexpected to move to Denver in the next five years, the demand for rental units is outpacing supply. This creates a highly competitive environment, particularly in desirable areas like RiNo and LoDo, where renters are willing to pay a premium for urban amenities, proximity to work, and lifestyle benefits.

Increasing Competition for Rental Units

Denver's rental market has become one of the most competitive in the U.S., with a low vacancy rate of around 5.1%, according to Forbes. The tight supply of rental properties means that units are being snapped up quickly, often with multiple applications on day one of listing. This is especially true for high-demand areas like RiNo, where new luxury developments are attracting high-income renters seeking premium amenities and vibrant city living.

In 2024, renters should be prepared to act fast. In a market where the average unit stays on the market for just 15 days, it’s essential to have all documents, deposits, and leasing agreements ready. Those looking for affordable rental options may need to widen their search to include neighborhoods outside the city center or consider shared living arrangements to manage costs.

Luxury Rentals Are Leading the Market

With more affluent renters entering the market, luxury apartments are dominating the new construction landscape. In 2024, developers are focusing heavily on upscale units with high-end amenities such as resort-style pools, fitness centers, rooftop lounges, and concierge services. For instance, properties like Modera River North and AMLI RiNo offer residents exclusive access to community spaces, fitness centers, and high-tech home features. According to Apartment List, the majority of new rental housing hitting the market will be at the higher end of the price spectrum.

This trend is driven by a growing demographic of renters earning over $150,000 annually, a figure that has more than doubled between 2016 and 2021, according to U.S. Census data. These renters are opting for luxury rentals rather than purchasing homes due to rising mortgage rates and the convenience of renting.

Rising Mortgage Rates Keep Renters in the Market

Mortgage rates are expected to remain high in 2024, which will likely discourage many potential buyers from transitioning into homeownership. This means more people will continue to rent, putting additional pressure on an already tight rental market. For those looking to avoid the high cost of buying a home, renting remains the more affordable option—albeit one that is becoming increasingly expensive.

According to Relocity, potential buyers who would normally enter the housing market are holding off due to mortgage rates hovering around 7%, pushing them into the rental market. This prolonged stay in rentals will contribute to higher demand and rising costs.

The Future of Affordable Housing

Affordable housing remains a significant challenge in Denver. While developers focus on building high-end units, the shortage of affordable housing is becoming more pronounced. The City of Denver has set plans to increase affordable housing availability, but the demand far exceeds supply.

In 2024, the lack of affordable rental units is likely to push more renters into suburban areas where prices are lower, but transportation costs and commute times may increase. The need for affordable housing is expected to grow as renters with moderate incomes struggle to keep up with the rising cost of living in the city. Relocity reports that affordable housing initiatives are in progress, but they have yet to meet the growing demand.

What Renters Can Do to Prepare for 2024

As competition heats up and rental prices continue to rise, renters should prepare themselves for the evolving market. Here are a few tips for navigating Denver’s rental landscape in 2024:

1. Act Quickly: With such a competitive market, renters need to be ready to submit applications and deposits as soon as they find a suitable property.
2. Consider Flexibility: If possible, look for neighborhoods outside the city center or consider renting further from urban areas to find more affordable options.
3. Budget for Higher Rents: Renters should anticipate further rent increases and budget accordingly. If you’re renewing your lease, be prepared for potential price hikes.
4. Explore Shared Living: Shared living arrangements or co-living spaces are becoming more popular, especially in high-demand areas. This option can provide access to prime locations while sharing costs with roommates.
5. Look for Incentives: Some luxury apartment buildings may offer incentives like reduced rent for the first few months or other perks to attract renters in a competitive market.

Final Thoughts: The Denver Rental Market in 2024

Denver’s rental market will remain one of the most competitive and dynamic in the country in 2024. With rising rental prices, increasing competition for available units, and the ongoing influx of high-income renters, the market presents both challenges and opportunities. Renters should be prepared to navigate this competitive landscape by acting fast, budgeting wisely, and considering alternative options like co-living.

While the city continues to evolve, so too does its rental market. For those looking to live in Denver, understanding these predictions and preparing accordingly will be key to securing the right rental in 2024.

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