Denver, CO outdoor lifestyle and thriving tech sector; slight price correction offering buy opportunities. This report covers current market conditions, the full investment arithmetic on a median-priced rental, and where Denver ranks against the 19 other metros tracked here.
Current Market Snapshot
Investment Analysis
With a gross yield of 4.3% and a median price of $525,000, Denver sits at the lower end of the yield spectrum. A typical 2-bedroom property rents for approximately $1,881/month based on HUD Fair Market Rent data.
The affordability index of 73 suggests housing costs exceed what the median household can comfortably afford — watch for affordability-driven demand moderation.
Market Temperature: Warm
With a median DOM of 38 days and approximately 4,200 active listings and balanced competition, Denver's market is currently classified as warm. Balanced conditions allow time for due diligence and negotiation.
The Numbers on a Median-Priced Rental
Buying the median Denver home at $525,000 with 20% down takes $120,750 in cash — a $105,000 deposit plus roughly $15,750 in closing costs at 3% — and leaves a $420,000 loan. At 7.0% over 30 years that is $2,794/month in principal and interest.
On those assumptions the median Denver rental produces a 1.14% cap rate and falls roughly $2,296 a month short of covering debt service. Cash-on-cash return on the $120,750 invested is -22.82%, and the debt service coverage ratio is 0.18× — below 1.0×, meaning the property cannot service its own debt at 20% down — this is an appreciation play, not a cash flow one. On a rent basis, you need $4,594 a month to break even — 144% above the $1,881 HUD benchmark.
Rate and Rent Sensitivity
Financing cost dominates the outcome. One percentage point on the mortgage rate moves monthly cash flow by more than a 10% swing in rent does:
| Mortgage Rate | P+I Payment | Monthly Cash Flow |
|---|---|---|
| 6.0% | $2,518/mo | -$2,020/mo |
| 7.0% | $2,794/mo | -$2,296/mo |
| 8.0% | $3,082/mo | -$2,584/mo |
| Rent Scenario | Monthly Rent | Cap Rate | Monthly Cash Flow |
|---|---|---|---|
| HUD FMR − 10% | $1,692/mo | 0.77% | -$2,456/mo |
| HUD FMR | $1,881/mo | 1.14% | -$2,296/mo |
| HUD FMR + 10% | $2,069/mo | 1.5% | -$2,137/mo |
How Denver Ranks
Among the 20 metros covered here, Denver is 19th by gross rental yield and 3rd most expensive. Its 4.3% yield sits below the 5.15% median of the set, and its $525,000 price sits above the $390,000 median. The price-to-rent ratio is 23.3× and the price-to-income ratio is 6.2× against a median household income of $85,000.
The metros closest to Denver on gross yield are Salt Lake City, UT (4.4%), Miami, FL (4.5%), Boise, ID (4.6%). If Denver is on your list, those are the markets whose numbers you should be holding it against — not the national average.
What Has to Be True for Denver to Work
A median-priced rental here consumes $27,552 a year in cash. That is not automatically a bad deal: the same loan repays $4,266 of principal in year one, so the true first-year drag is about $23,286. To break even on the cash line alone the property has to appreciate 5.25% a year, against the -0.5% the metro has actually posted over the past twelve months. Hold it five years and amortisation alone builds $24,647 of equity — the question is whether you can fund the shortfall for that long without selling at the wrong moment.
Key Data Points
| Metric | Value |
|---|---|
| Median Sale Price | $525,000 |
| YoY Price Change | -0.5% |
| Median Days on Market | 38 days |
| Active Listings | 4,200 |
| Est. 2BR Fair Market Rent | $1,881/mo |
| Gross Rental Yield | 4.3% |
| Median Household Income | $85,000 |
| Affordability Index | 73 |
| Price-to-Rent Ratio | 23.3× |
| Price-to-Income Ratio | 6.2× |
| Gross Rent Multiplier | 23.3 |
| Cap Rate (45% expense basis) | 1.14% |
| Cash Flow at 20% Down | -$2,296/mo |
| Cash-on-Cash Return | -22.82% |
| Break-Even Rent | $4,594/mo |
Getting Live Data via API
ZipMarketData provides live data for all ZIP codes within the Denver, CO metro. Use the /market-stats endpoint with any Denver ZIP code for the most current figures — or run the same analysis without writing code in the dashboard.