With historically-low unemployment powered by an economy that is still chugging along, it’s no surprise that rents have steadily increased in Denver over the past several years.
Depending where you look, the average rent across the metro area ranges from $1,300 to more than $1,500 per month. Often, that rent pay can contribute for half or more of a renter’s monthly take-home pay.
And in order to cover that rent, it very well could mean needing to work more hours.
SmartAsset delved into the numbers and roughly figured out the hours of work needed to pay monthly rent across the 25 largest American cities. Denver ranked No. 5 — up two spots from a year ago.
According to the recent study, the median monthly rent across Denver is $1,330, which actually is the third-lowest rent across the cities that cracked the top 10. But the average worker in Denver earns $42,409, which means take-home pay is $34,335 after taxes, or about $21.65 an hour. In order to cover that median rent, a person would need to work about 61.4 hours. Securing a roommate wouldn’t be a bad idea, either.
Denver ranks behind Boston, where rents require the average worker to put in 67 hours to pay for a month’s rent; San Diego (73 hours); Los Angeles (74 hours); and San Jose (76 hours).
Of note, it requires about the same amount of hours worked in New York City, which ranked just behind Denver.
The study used U.S. Census data to determine average earnings, accounting for take-home pay after income taxes and assuming that no additional money was going toward a retirement account. The median monthly rent data also came from the U.S. Census Bureau.
The study also highlights another important point for renter: That money (and those hours worked!) could be going toward equity in a home.
While Denver housing prices have increased drastically over the past decade, the market is beginning to level off slightly, allowing buyers to better plan for their home purchase. Condos remain the most logical option for first-time buyers who might struggle to scrape together a larger down payment.
“There are more sub-$200,000 condos on the market than Denver residents may realize today,” said Lori Greenly, founder of Denver High-Rise Living, a real estate firm that focuses on Denver’s growing condo market. “If renters can organize their finances to a point where they can save $5,000 to $10,000, they could be homeowners here and won’t have to worry about paying their hard-earned money to a landlord.”
Across all of the cities analyzed, rents typically eat up 30% of an income, according to the study. One way a renter could find some wiggle room in their budget and save enough money for a down payment is by leasing out space to a roommate, if their rental unit allows for it. They may even consider slightly buying up in house if they don’t mind collecting rent from a roommate, who, in return, would help build more equity in their purchase.
If you want to learn more about Denver’s condo market, reach out to one of Denver High-Rise Living’s condo experts today.