An increasing supply of apartments are coming online in the Denver area like this one in the Lower Highland neighborhood photographed in November 2013.

(Photo: Courtesy of Ryan Dravitz, DenverInfill.com)
Rents in the Denver area are increasing at the ninth-highest annual growth rate in the nation, according to Axiometrics, a Dallas-based research firm. 

But the firm also reports one part of the market, downtown Denver, is weakening.

In fact, downtown rents are falling for the first time in years. In April, the average growth rate over the previous 12 months was .6 percent. That's compared to an annual growth rate in April 2013 of 4.8 percent.

Axiometrics analyst Stephanie McCleskey blames an increasing supply.

"There is a lot of new construction for multi-family housing in downtown Denver," McCleskey says. "In 2013 we saw about 1,500 units come online, and then for 2014 we’re expecting twice that."

The rental market in the Denver area withstood the recession in better shape than many other areas with above-average rental growth since late 2010. Axiometrics says as of April of this year, the annual growth rate is 8 percent.

Occupancy rates in the Denver area have increased about half of a percentage point on an annual basis in April to 95.85 percent.

McClesky says an influx of millennials and above-average job growth in recent years are contributing to the health of the overall Denver rental market.