The number of apartment vacancies and rent levels in the Denver metro area have held steady in the third quarter of 2023, according to a recent report from the Apartment Association of Metro Denver, which also urged area builders to continue production to meet high housing demands.

The vacancy rate sat at 5.4% in the third quarter, a marginal decrease from the previous quarter. The average rent is now $1,888 a month — a .5% increase from the second quarter and a 1% increase from last year, according to the report. Median rent in Denver is $1,810.

“As the vast majority of costs are increasing all around us, to have rental rates so flat is good news for renters,” Mark Williams, the executive vice president for the Apartment Association of Metro Denver, said in a news release.

Four counties in the six-county metro Denver region experienced a decrease in vacancy rates. Two counties saw increases.

Douglas County had the largest drop in vacancy rates, dipping 70 basis points to 5.4%. Jefferson County’s rate fell by 50 basis points to 4.9%. Boulder and Broomfield had the lowest vacancy rate with 4.7%. Denver’s rate rang in the highest at 5.6%.

“Buildings constructed since 2020 had the highest vacancy at 6.0%. Those constructed prior to 1970 had the lowest vacancy at 4.5%,” report author Cary Bruteig of Apartment Insights said in the release.

The metro region has more than 411,000 apartment units in all. More than 2,800 new apartments entered the market in the third quarter of 2023, up from the 2,700 units added each quarter in the past few years, according to the association. There could be between 2,500 and 3,000 units added in the fourth quarter.

Approximately 120,000 more units are in the construction pipeline longer term, according to the report, with roughly 48,000 units under construction already. The state and city’s political environment has some developers nervous, Williams added in the release, suggesting it could result in some projects getting pulled. Williams cited laws that went into effect this year that could affect project costs.

The amount of planned construction will likely increase vacancy rates, which should ease rents or continuing holding them steady, Bruteig said.

Drew Hamrick, senior vice president for government affairs and general counsel for the association, argued the solution for the still-challenging housing market is to provide more housing and “let the market naturally sort itself out.”

“This data shouldn’t take away from efforts to increase housing supply,” Hamrick said.

And while rent growth in Denver and other markets is cooling, pressures on renters’ wallets aren’t letting up.

Another report from Apartment List found that roughly 52% of households in Denver are “cost-burdened.” That’s up from 49% in 2019. A renter is considered cost-burdened if they spend more than 30% of their income on rent. The report also found 25% of renters are “severely cost-burdened,” meaning renters are spending more than half of their income on rent.

Citing U.S. Census Bureau data, the report noted that median rent in the Denver metro area increased by 19% between 2019 and 2022, while the median income among renters rose by 16%.