The apartment vacancy rate in Colorado fell to 5.6% in the fourth quarter from 5.8% a year earlier, suggesting more state residents are turning into long-term renters as opposed to homebuyers.
At the same time, rental rates across the state are soaring.
The Colorado Division of Housing found year-over-year drops in apartment vacancy rates in every metro area for the past four years, except Greeley in northern Colorado. The Denver apartment vacancy rate fell from 5.5% in the fourth quarter of 2010 to 5.4% in the three months ended Dec. 31.
The combined vacancy rate for all areas fell to the lowest since 2007. Meanwhile, the average rent increased 3.2% to $900 from $871 in the year-earlier fourth quarter.
The largest rental increase occurred in the Fort Collins-Loveland area, with a 9.1% rise from the fourth quarter of 2010, reaching an average of $973 a month. The average rent in metro Denver hit $932 during the fourth quarter.
"The overall trend in rents continues upward and rent increases in Fort Collins, Greeley and Colorado Springs were quite substantial during the fourth quarter," said Ryan McMaken, a spokesman with the Colorado Division of Housing. "This is likely to continue in the near term as more households look to rental housing and if in-migration from other states remains strong."