Should I Rent or Buy in Colorado Springs Right Now?

A Mortgage Tool Bus Guide for Colorado Homebuyers

🚌 Stop #1: What the Colorado Springs Market Is Actually Doing

Before we compare renting and buying, it helps to know what's actually happening locally instead of guessing from national headlines. Here's what elevateMLS (the Pikes Peak REALTOR® Services Corp's own data) showed for El Paso County single-family and patio homes in July 2026:

● Median sales price: $494,950 — down about 1.0% from June and roughly flat compared to July 2025

● Average sales price: $568,633

● Months of supply: 3.8, up from 3.7 a year ago — more homes for buyers to choose from

● Total active listings: 4,317, up 2.1% year-over-year

● New listings: 1,716 in July, up 3.7% from July 2025

None of that points to a crash. It points to a gentle rebalancing — more homes on the market, prices holding close to steady, and buyers getting a bit more breathing room than they had a couple of years ago.

🚌 Stop #2: Renting vs. Buying — The Apples-to-Apples Version

You'll often see Colorado Springs rent quoted around $1,300 a month — but that's a blended average across studios and one-bedroom apartments. If you're comparing renting to owning a house, the fairer number is what a house actually rents for locally: about $2,328/month on average for a 3-bedroom rental (apartments.com/CoStar Group data). Here's what a mortgage payment looks like on the El Paso County median home price of $494,950, using a sample 30-year rate of 6.51% (rates change daily, so treat this as an example, not a quote):

● FHA loan, 3.5% down: about $3,022/month in principal and interest on a loan amount of roughly $477,627

● VA loan, 0% down (for eligible service members and veterans): about $3,132/month in principal and interest, with no monthly mortgage insurance

Those numbers don't include property taxes, homeowners insurance, or mortgage insurance where it applies — your real payment will be higher, and it's worth running your actual numbers on the Monthly Payment Tool before assuming anything. Even against the fairer $2,328 house-rent number, a median-priced mortgage payment still runs higher. But here's what doesn't show up in a rent receipt: every one of those mortgage payments puts a little more of that home in your name, and the principal and interest portion of a fixed-rate payment doesn't climb every year the way rent tends to.

🚌 Stop #3: The Under-$300K Option Most Buyers Skip

The county median gets all the attention, but it isn't the only entry point. Colorado Springs currently has hundreds of homes listed under $300,000 — mostly condos, townhomes, and a handful of smaller single-family homes, concentrated in neighborhoods like Westside, Southeast Colorado Springs, and parts of the Downtown area. Here's what that looks like on paper. On a $280,000 home with an FHA loan at 3.5% down:

● Down payment: about $9,800

● Loan amount: about $270,200

● Estimated principal and interest: about $1,710/month

That's already below the $2,328 average house rent, and close to the $1,308 blended apartment average — before taxes and insurance are added in. It's not the home everyone pictures, but for a first purchase or a starter property, it's a real way to stop renting without needing median-price numbers.

🚌 Stop #4: You Don't Need 20% Down — and You Don't Have to Do It Alone

A lot of people stay in “renting mode” longer than they need to because they think buying requires a huge pile of cash up front, solo. Neither part of that is true for most buyers:

● FHA: as little as 3.5% down with a 580+ credit score (HUD Handbook 4000.1)

● VA: 0% down for eligible veterans, active-duty service members, and certain surviving spouses (VA.gov)

● Conventional: as low as 3% down for many first-time buyers (Fannie Mae)

Fannie Mae also updated how conventional loans get evaluated as of November 15, 2025 — Desktop Underwriter no longer applies a hard 620 credit score cutoff and instead looks at the whole borrower picture. Fannie Mae itself has described the everyday impact of that change as small, so it's not a magic fix for a thin credit file — but it's one more sign that “you need great credit and 20% down” isn't the rule it used to be.

Two more options worth knowing about if the numbers above still feel out of reach on your own:

● Buying with a co-borrower: this is a bigger trend than most people realize. One national study found 15% of Americans have already co-purchased a home with someone other than a romantic partner — a friend, sibling, or parent — and another 48% said they'd consider it (JW Surety Bonds survey, via Fortune). FHA and conventional loans both allow certain co-borrower and non-occupant co-borrower arrangements, even if that person won't live in the home — ask about the specifics for your situation.

● Boarder or roommate income: under general conventional guidelines, a roommate's rent generally doesn't count toward qualifying. The exception is Fannie Mae's

HomeReady program, which allows documented boarder income (up to 30% of your qualifying income) if that person has already lived with you for at least 12 months and you can show a documented history of rent payments for at least 9 of the past 12 months. In plain terms: an existing roommate moving with you to the new place may be able to help you qualify. A plan to rent out a spare room to someone new after closing generally won't count on the loan application — but it's still real money in your own household budget once you own the place.

🚌 Stop #5: How Long You Plan to Stay Matters More Than the Market

A common rule of thumb: buying tends to start winning out over renting once you plan to stay somewhere around 3 to 5 years. That's usually enough time to cover closing costs and ride out normal ups and downs. If you know you're moving again in a year or your situation is still up in the air, renting a little longer isn't “wasting money” — it's just the right tool for where you are right now. No shame in that. Baby steps.

🚌 Stop #6: Signs You Might Be Ready to Make the Jump

● Your income and housing plans feel stable for the next few years

● You have (or have a realistic plan for) the down payment and closing costs

● You've seen your real estimated payment — not a guess — and it fits your budget

● You're curious about the process instead of dreading it

Helpful Tools

● Rent vs. Buy Calculator — mortgagetoolbus.com/rentvsbuy

● Monthly Payment Tool — mortgagetoolbus.com/monthlypaymenttool

● Homebuyer Roadmap — mortgagetoolbus.com/homebuyer-roadmap

Frequently Asked Questions

Is Colorado Springs a buyer's market right now?

It's leaning that direction. elevateMLS data for El Paso County shows months of supply and total active listings both up compared to a year ago, with new listings rising too — all signs that buyers have more room to shop and negotiate than they did during the peak seller's market years.

Do I need 20% down to buy a home in Colorado Springs?

No. FHA loans allow as little as 3.5% down, VA loans allow 0% down for eligible military borrowers, and conventional loans can go as low as 3% down for many first-time buyers. Twenty percent down avoids mortgage insurance, but it isn't a requirement to buy.

Is it cheaper to rent or buy right now?

It depends on your specific numbers, the price point you're comparing, and how long you plan to stay. A median-priced mortgage payment still runs higher than even the average house rent in Colorado Springs. But an entry-level purchase under $300,000 can come in close to or below typical rent. Run your real numbers on the Rent vs. Buy Calculator instead of relying on averages.

Can I buy a home with someone who won't live there?

In many cases, yes. FHA and conventional loans both allow certain co-borrower arrangements where a family member helps you qualify without occupying the home. This is more common than people think — about 15% of Americans have co-purchased a home with someone other than a romantic partner. Every situation is different, so this is worth a direct conversation about your specific numbers.

Can I count rent from a roommate to help me qualify for a loan?

Generally not if it's a new roommate moving in after closing. The main exception is Fannie Mae's HomeReady program, which allows documented income from an existing roommate who has already lived with you for 12 months, with a documented rent-payment history. A plan to rent a room to someone new later is real money for your own budget, but typically isn't counted on the loan application.

How long should I plan to stay in a home before buying makes sense?

A common rule of thumb is 3 to 5 years, which is usually enough time to cover closing costs and absorb normal market movement. If your timeline is shorter or still unknown, that's useful information — not a reason to feel behind.

❤️ Let’s Go Home

— Kat Fish
Mortgage Tool Bus
NMLS #2609071