Apartment rent growth in the Denver area hit a 14-month high to close out the first quarter, though negative annual rent growth and widespread concessions are continuing to weigh on the market.

The average asking rent increased 0.6% in March, according to CoStar data, marking the strongest monthly rent gain since January 2024. The average rent for an apartment in the Denver market hit $1,842 per month in March, up from $1,823 per month at the start of the year.

While the vacancy rate of 11.3% remains near historic highs, vacancy likely peaked in the fourth quarter and is now on a downward swing due to a combination of higher levels of demand and a slowdown in construction. Denver’s apartment market is expected to continue tightening through the spring leasing season.

The first quarter was not all smooth sailing for area landlords, though. Monthly rents fell in February by 0.1%. While the decline was minimal, it marks the first February in more than a decade to see rents pull back.

Concession usage remains widespread across the market. About 41% of properties in the Denver market were offering some form of incentive, such as one month’s free rent, in March. This is down from 50% in February but remains elevated from a year ago when 25% of properties offered incentives.

Industry professionals note that renters are chasing concessions, leading to high tenant turnover. Renters can expect up to 10 weeks of free rent on a one-year lease in new apartment complexes. Concessions have also become increasingly common in well-leased, or stabilized, apartment buildings as property managers focus on shoring up renewals.

Until concession usage abates, landlords will likely continue to face difficulty in pushing rates.

Nearly all areas in Denver are reporting negative annual rent growth. The steepest declines are occurring in construction-heavy areas like Aurora, where rents are down 5.3% from the previous year. Downtown Denver has also reported heavy losses, with annual rents down 3.5%.

Looking ahead, CoStar forecasts that supply and demand will reach equilibrium in 2025. However, vacancies will likely remain high this year, and rents aren’t projected to return to the long-term benchmark until 2026.