Homebuyers have faced intense competition for years now, but apartment renters are increasingly finding the odds stacked against them as they try to land a new place, with 14 applicants on average chasing each vacant apartment in metro Denver in 2021, according to a new study from RentCafe and Yardi Matrix.
That may sound extreme, but Denver actually matches the U.S. average for applicants per open apartment. In Knoxville, Tenn., vacant apartments averaged 36 applicants, while in Pennsylvania’s Lehigh Valley 35 people applied for each available apartment and in Eugene, Ore., 30 people applied. In Colorado Springs, the only other Colorado metro examined in the study, the average was 15 applicants per apartment, while in Albuquerque and Salt Lake City, an average of 19 applicants sought each vacant apartment.
Of the 105 largest markets examined, apartment supply tended to be much tighter in smaller metros than in larger metros, reflecting both the lack of attention developers have paid to those smaller markets and the flexibility in relocating that remote work has provided. Eugene ranked as the nation’s most competitive apartment market in 2021, followed by San Diego and Knoxville. California’s Central Coast region ranked fourth tightest, followed by the Lehigh Valley and Sacramento.
The large vs. small metro theme played out in Colorado, where Denver ranked 38th while Colorado Springs ranked as the 27th tightest apartment market, even though both had a similar occupancy rate of 95.4%, which matched the U.S. occupancy rate, according to Yardi Matrix.
In Colorado Springs, vacant apartments turn over in 22 days, which is the seventh fastest pace in the country, and ahead of Denver’s turnover time of 27 days. One area where Denver ranks ahead of Colorado Springs is the average credit score of applicants for apartments — 660 vs. 647. Nationally, the average credit score of renters is 640 and Denver renters had the 15th highest score.
One reason average credit scores are rising is that more higher-income millennials can’t afford to purchase a home and are continuing to rent, said Michelle Cretu, a spokeswoman for RentCafe, an apartment search engine.
“Nationally, the share of applications for apartments from renters who earn more than $50,000 is at its highest level in five years, 39%, as many would-be homebuyers were priced out of an overly competitive real estate market in 2021,” she said.
Aurora experienced a 28% jump in the past year in renters making more than $50,000, and other suburbs outpaced Denver’s 11% growth rate as more renters sought more living space for their monthly payment than what the urban core could offer, a trend experts are calling the “doughnut effect,” Cretu said.
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