Despite a historic construction wave that has sent vacancies soaring, apartment rents in Denver increased by 0.8% in August. This marks the largest monthly increase since January 2023 and brings year-to-date rent growth to nearly 3%.

Average market-rate rents increased to $1,898 per month, according to CoStar data, and the recent gains reversed what appeared to be the beginning of a downward trend that was expected to last through the remainder of the year. Typically, rent growth declines in late summer and lasts through the winter months in response to the seasonal slowdown in demand.

Renter demand in the Denver apartment market staged an impressive rebound through the first eight months of the year, helping to support continued rent growth. Net absorption, or the difference between move-ins and move-outs, totaled over 8,500 units through the end of August. With 2,900 units absorbed in July and August alone, this is already the best third quarter since 2021 when demand was at an all-time high.

Still, the remaining months of 2024 will prove to be challenging for Denver’s landlords, as completions are expected to remain elevated through the final months of the year.

CoStar projects that in total, 16,000 units will be completed in 2024 while only 10,600 units will be absorbed. These projections show that among major markets across the country, Denver will end the year with one of the widest supply and demand gaps, ranking just behind the Texas markets of Dallas-Fort Worth and Austin. Vacancy is expected to exceed 10% for the first time by year-end.

Landlords are hopeful that 2025 will mark a return to historical norms, as new groundbreakings in the past year have dwindled to a decade low. Fewer completions are setting the stage for a more supply-constrained market, which should support stronger rent gains.