Colorado Springs Rents Down 12.5% Since 2022 — But the Tide Is Turning for 2026
v.2025-10
Dear Owners,
According to national rental market reports, Colorado Springs rents have fallen 12.5% since their 2022 peak, ranking as the third-largest decline in the nation. It’s been a challenging couple of years for property owners with rising inventory, increased competition, and changing renter behavior have all contributed to the drop.
But there’s good news ahead: we believe the market has hit bottom, and all indicators now point toward a rebound in 2026.
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Why 2026 Looks Like a Turning Point
After two years of softening rents driven by record construction, the Colorado Springs market is finally on the verge of tightening. Analysts project that by mid-2026, demand will once again outpace supply, setting the stage for positive rent growth and stronger occupancy rates across the region.
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Construction Slowdown: Less Competition Ahead
The most important shift heading into 2026 is a dramatic slowdown in new apartment construction. Following a record-breaking year in 2024 with more than 6,000 new units completed, the pipeline fell sharply in 2025 and is expected to remain low heading into 2026 with fewer than 1,000 new units anticipated.
This reduction in new supply will ease competition for tenants, helping stabilize existing communities and reduce the need for deep concessions. Simply put, fewer new properties mean healthier rent growth for established landlords.
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Rent Growth Expected to Rebound
After eight consecutive quarters of rent declines, positive rent growth is projected to return by mid-2026. Forecasts call for an annual rent increase of about 2.8% by the fourth quarter of 2026.
While modest, this rebound represents a significant shift from the declines of recent years—and marks the start of a more stable, sustainable rental market moving forward.
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Demand Remains Strong and Stable
Even amid falling rents, renter demand in Colorado Springs has stayed resilient. The city continues to attract residents drawn to its affordability compared to Denver and other Front Range cities. Population growth, a steady job market, and the area’s strong military presence provide ongoing support for consistent leasing demand.
With fewer new units entering the market, this steady demand will help absorb existing inventory, paving the way for a firmer market foundation in 2026.
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Occupancy on the Upswing
As new construction slows and demand continues to climb, occupancy rates are expected to rise throughout 2026. Some submarkets—particularly East Colorado Springs—are projected to surpass the 90% occupancy threshold again, a positive sign of market normalization.
For landlords, that means fewer vacancies, faster lease-ups, and improved cash flow stability.
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What This Means for Landlords
For property owners, 2026 is shaping up as a year of renewed balance and opportunity. The worst of the rent declines appear to be behind us, and the fundamentals are strengthening.
Next year will be the time to:
- Reevaluate rent pricing strategies in anticipation of growth.
- Phase out concessions as competition eases.
- Prioritize tenant retention to capitalize on improving occupancy rates.
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Bottom line: After a 12.5% drop from the 2022 peak, the Colorado Springs rental market appears to have found its footing. With construction slowing, demand holding steady, and rents projected to rise again, 2026 is poised to be a year of recovery and renewed stability for landlords across the region.
Warm regards,
The Springs Team Insider
