The apartment vacancy rate in Denver hit a 10-year low in the second quarter as more families and citizens opted to rent rather than buy their next home. The second-quarter vacancy rate hit 4.8%, the lowest since the first quarter of 2001, according to data from the Apartment Association of Metro Denver and the Colorado Division of Housing. Apartment vacancy rates in the area fell 21% from a vacancy rate of 6.1% in early 2010. The Colorado Division of Housing noted more families impacted by foreclosures are moving into single-family rental units and, in some cases, apartments. "Most people who foreclose seem to be mostly moving into single-family rentals, and not into apartments, although some certainly do go back to apartments," said Ryan McMaken, a spokesperson for the Colorado's Division of Housing. "A vacancy rate below 5% is generally regarded as a sign that the market is tight," said Gordon Von Stroh, a professor of business at the University of Denver and author of the report. "The vacancy numbers haven't been lower than this since before the dot-com bust in Colorado, and that was a period marked by a scarcity of rental housing in many areas." A rise in demand meant higher rental rates for the area, with the median rent in Denver rising to $863.37 a month, up 2.5% from $842.70 last year. "On average, rents were very flat in many areas between 2002 and 2010, but we've begun to see some sustained growth in recent quarters," McMaken said. "However, in the year-over-year comparison for the second quarter, rents haven't really kept up with inflation. The CPI is up about 3% over the past year, but the metro Denver median rent increased 2.5%." The Denver area trend is similar to what's happening around the nation, according to a Housing Market Insights report from Morgan Stanley (MS) last week. Morgan Stanley researchers noted consumers shaken by mortgage delinquencies, foreclosures and liquidations are gradually becoming renters in today's marketplace. Write to Kerri Panchuk.