The Housing Market in Denver Today
Denver’s housing market remains competitive in 2023, with steady demand and limited inventory putting upward pressure on prices. The metro area continues to attract new residents drawn by its strong job market, outdoor recreation, and urban amenities. While the pace of price growth has moderated compared to the frenzied peaks of 2021-2022, both rents and home values are holding at elevated levels.
Construction cranes dot the skyline as developers race to add apartments and condos, especially in trendy neighborhoods like RiNo, LoHi, and Sloan Lake. However, the supply of new housing is still falling short of demand, keeping vacancy rates low. Single-family homes are also scarce, with many sellers receiving multiple offers. The market favors those with flexibility and the ability to act quickly when an opportunity arises.
While the Denver area remains more affordable than coastal metros like San Francisco and New York, the cost of living is now notably higher than the national average. Housing is the biggest factor, but transportation, utilities, and other necessities also tend to cost more in Denver. Wages have risen but not always kept pace, making budgeting a priority for many households.
Renting in Denver: What’s Typical?
As of mid-2023, the median rent for a one-bedroom apartment in Denver is around $1,800 per month. For a two-bedroom, renters can expect to pay closer to $2,300. These figures include core utilities like water, sewer, and trash, which are often covered by landlords. Electricity, gas, and internet are usually extra, adding $100-300 to the monthly total.
Rent prices vary widely by neighborhood, with the most expensive areas concentrated near downtown and in trendy spots like Cherry Creek and Highlands. More affordable options can be found in older buildings, suburbs like Lakewood and Aurora, and up-and-coming areas east of the city. Newer luxury buildings with amenities like fitness centers and rooftop lounges command the highest rents.
Denver’s renter population skews young, with the majority under age 35. Many are single professionals drawn by career opportunities in tech, healthcare, aerospace, and other key industries. The area also has a significant number of downsizing retirees and remote workers who enjoy the active lifestyle. Families are more likely to rent houses or townhomes rather than apartments to gain extra space.
Owning a Home in Denver
The median price for a single-family home in metro Denver now stands at $615,000, a major jump from $465,000 just three years ago. Assuming a 10% down payment and today’s 6.5% mortgage rates, the typical buyer would face a monthly payment around $3,900 including principal, interest, taxes, and insurance. Most lenders recommend a household income above $135,000 to comfortably afford such a home.
On top of the mortgage, owners need to budget for property taxes (0.6% in Denver), homeowners insurance ($1,500/year on average), and potentially HOA dues ($200-500/month). Maintenance and repairs are also the owner’s responsibility, adding to the overall cost. Utilities tend to run higher in houses than apartments due to the larger space.
Despite the steep entry point, many Denverites still aspire to own a home as a long-term investment and for the freedom to customize their space. The most attainable options are often smaller houses, townhomes, and condos in more suburban settings. With persistence and careful budgeting, ownership is within reach for those with stable incomes and good credit.
Renters vs. Homeowners: Who Lives Where?
Denver’s homeownership rate stands at 50%, meaning half of households own their home and half rent. This is lower than the 65% national average, reflecting the young workforce and high housing costs. Ownership is more common in established neighborhoods like Washington Park, Hilltop, and Stapleton, while renting dominates the urban core.
For many young professionals, renting is the only viable option as they build their careers and savings. The flexibility is also appealing for those who may need to relocate for work. Families are more evenly split, with some appreciating the space and stability of owning while others value the convenience and amenities of renting.
The path to ownership has clear financial hurdles, from saving for a down payment to qualifying for a mortgage. But the cultural factors are also significant. With for-sale inventory so limited, buyers must often compromise on location or size. The fast pace favors those with the means to act decisively. Patient saving and a long-term mindset are essential.
| Expense | Apartment | House |
|---|---|---|
| Rent/Mortgage | $1,800 | $3,900 |
| Utilities | $150 | $350 |
| Taxes & Insurance | $0 | $600 |
| HOA | $0 | $350 |
| Total | $1,950 | $5,200 |
Here’s what housing costs might look like each month in Denver:1
What’s Driving Costs Up or Down?
The main force putting upward pressure on Denver housing costs is population growth outpacing new construction. The metro area has added over 100,000 residents since 2020, drawn by the strong economy and quality of life. While developers are building at a rapid clip, supply hasn’t caught up to demand, allowing landlords and sellers to command top dollar.
Zoning and land-use policies also play a role, as much of Denver is restricted to single-family homes. This limits the potential for dense, affordable housing in high-demand areas. Proposals to allow accessory dwelling units (ADUs) and small apartment buildings in more neighborhoods have gained traction but face pushback from some homeowners.
On the plus side, the pipeline of new apartments should help stabilize rents in the coming years. Projects underway range from high-rise towers downtown to low-rise complexes in transit-oriented suburbs. The softening tech sector has also cooled demand slightly. But as long as Denver remains a desirable destination, costs are likely to stay elevated compared to slower-growth regions.
FAQs About Housing in Denver
- Is Denver affordable to live in? While pricier than the national average, Denver is more affordable than many large coastal cities. Expenses can be manageable with smart budgeting and housing choices.
- Why are housing prices changing? Population growth, limited supply, and economic trends all influence the market. Prices have climbed significantly in recent years but are moderating.
- How does Denver compare to nearby cities? Housing costs tend to be higher than in Colorado Springs and Fort Collins but lower than in Boulder and mountain resort towns. Denver offers the widest range of options.
Making Smart Housing Decisions in Denver
For renters, the key is to strike a balance between location, space, and amenities that fits your budget. Being flexible on neighborhood and willing to look at older buildings can open up more affordable options. Roommates are also a common strategy. Use tools like our monthly budget calculator to determine what you can comfortably spend.
Prospective buyers need to weigh their long-term plans and crunch the numbers carefully. A home is a major financial commitment that only makes sense if you intend to stay for at least 3-5 years. Consider all the costs of ownership, not just the mortgage. Work on saving a solid down payment and improving your credit to secure the best rates.
Whether renting or buying, it’s wise to keep housing costs to 30% of your income or less. This allows room for other goals like saving, investing, and enjoying all that Denver has to offer. While the market can be challenging, a patient, proactive approach can help you find a place to call home in the Mile High City.
1 Estimates reflect mid-range properties and average usage.