If you read the financial pages of the newspaper, or regularly look at the latest trends in residential real estate, it is easy to see why rental homes in Colorado Springs are drawing so much interest.  Despite the fact that the Colorado Springs real estate market is much healthier than most U.S. cities, buyers are still approaching the housing market with a bit of trepidation. 

Articles like the recent post in “The Street” (6/17/11) proclaim that “more Americans are renting instead of owning these days…” and they are right.  According to the U.S. Census Bureau, homeownership has slipped to a low of 66.4 percent in Q1 of 2011 from a peak six years ago of 69.1 percent. 

There are several reasons why a qualified potential homebuyer would opt to rent in a questionable market.

1. They are waiting to see what happens next in the real estate market
2. A mortgage is much more difficult these days, especially if your credit score is low
3. They believe the housing market hasn’t yet “bottomed out”

While there is nothing wrong with these reasons, and it makes sense for many families to look at rental homes in Colorado Springs, the economic climate here is much different than in other areas of the country.  For one, as recently as January 2011, CNN Money selected Colorado Springs as one of the markets most likely to recover from the housing crunch, and even went as far as predicting prices would start to rise in January 2012. 

Renters may not be aware of this, but even in a questionable economy it is still more sensible to own a home instead of renting.  Mortgage interest and real estate taxes make a nice end-of-year tax deduction, and real estate has always been an excellent long-term investment.  The best reason to rent a home right now is if you aren’t sure how long you will stay in the area. 

For short-term residents, rental homes in Colorado Springs make a lot more sense.  But remember, if a short term commitment turns into a longer one, your rent may continue to increase. Unless you buy a home with a fixed interest rate and lock in a monthly payment, your housing costs as a renter will continue to rise.

Some forward-thinking homebuyers with decent credit have purchased rental homes in Colorado Springs as a way of guaranteeing a return on their investment.  With so many families choosing a rental home over a mortgage, these investors will have no problem finding tenants.