Everyone needs a place to live; it’s a basic human need after all. But what happens when paying for that roof over your head costs more than what’s considered affordable? As it stands, this is what many renters in Colorado are currently facing, with 50% of renters considered cost-burdened following the pandemic. So what does it mean to be “cost-burdened” and what does that mean for Colorado renters?
What Does It Mean To Be “Cost-Burdened?”
A renter is considered “cost-burdened” when they spend more than 30% of their income on housing costs. With rents rising and wages failing to follow suit, many Colorado renters find themselves allocating more and more of their monthly income towards their rent. Based on Quote Wizard’s data, 50% of Colorado renters spend more than 30% of their monthly wages towards their rent. Nationwide, that number sits at about 47%. Spending more towards housing leaves little left to go towards other essential needs or unexpected costs, such as car repairs, medical expenses, and savings.
Shrinking Options for Colorado Renters
Unfortunately, options are fairly limited for Colorado renters in the Denver area. Renting in Denver is still the cheaper option, with the costs to own a home averaging about 34% higher than average rents, according to data from Realtor.com. According to the same study, renting is the preferred option for many in the Denver area. The Mile High City ranked 7 out of 10 for major cities that prefer renting to buying. Part of this trend stems from a tough housing market for first-time homebuyers and many renters’ inability to find or afford a home to buy, and partly due to the rising trend of lifestyle renters, or those who prefer to rent.
In the two years since the pandemic began, the real estate world has undergone many different changes. Regulatory updates, new legislations at both the state and federal levels, eviction moratoriums, etc. Today’s rental market can be challenging for both renters and landlords alike. As an industry leader, Real Property Management Colorado is here to help answer any questions you may have regarding the current state of the Colorado rental market. We’re here to serve our clients and residents, both current and prospective, with all their property management needs.