Housing Shortage vs. Rising Inventory in the Colorado Springs Housing Market
You’re seeing more “For Sale” signs around town—and you’re not imagining it. Local inventory rose to about 4.4 months of supply in August 2025 (PPAR). During the pandemic years, we often sat closer to one month of supply. That’s a real shift for the Colorado Springs housing market.
So why do experts still talk about a housing shortage? Isn’t more inventory the opposite of a shortage? Here’s how both can be true at the same time—and what it means for Colorado Springs homeowners.
What a “Housing Shortage” Means for the Colorado Springs Housing Market
A housing shortage isn’t just today’s active listings. It’s the gap between how many households want or need a place to live and how many housing units actually exist. That bigger-picture mismatch is why you can have more listings on the market and still be “short” on housing.
Nationally, analysts estimate the U.S. is short 4 to 5 million homes. Several forces created that gap:
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Years of under building after the 2008 crash
Strong population growth, especially millennials forming households
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Higher borrowing costs that discourage homeowners from selling and builders from developing
Even though months of supply in Colorado Springs has risen, 4.4 months is still below the six months often considered a balanced market. Translation: the shortage hasn’t ended. It simply feels less intense than it did two or three years ago when inventory was at historic lows.
Where the Shortage Shows Up for Colorado Springs Residents
If we’re missing millions of homes nationwide, why isn’t homelessness everywhere? Because the shortage often shows up in quieter, everyday ways across El Paso County real estate decisions:
Doubled-up households. More than 3.7 million people live with extended family or share space out of necessity—not preference. Adult children staying with parents and multiple families sharing a home are common examples.
Overcrowding. Over 3 million Americans live in homes with too little space per person. Bedrooms, bathrooms, and living areas are stretched beyond what’s comfortable because the right-sized home isn’t available or affordable.
Extended renting. Many households that would prefer to buy remain renters. Limited choices and higher borrowing costs keep them in place, which increases rental demand and pressure on rents.
Reduced mobility. Owners who might normally upgrade or downsize stay put. If there aren’t appealing options—or monthly payments would jump—they delay moving, which keeps inventory from refreshing.
In short: most people have a roof, but more are compromising on space, privacy, location, or timing because the supply of housing units hasn’t kept up with the number of households who need them.
Homelessness in El Paso County: The Most Visible Edge of the Shortage
Some of the shortage does show up in homelessness. In January 2025, the Point-in-Time Count tallied 1,745 people experiencing homelessness in El Paso County, including about 522 unsheltered in tents, cars, or outdoors. That was a 34% increase year over year and the highest number recorded locally. Even with about 1,277 emergency and transitional beds, the system fell short by nearly 500 beds that night.
Why Rising Inventory Doesn’t End the Housing Shortage
Seeing more “For Sale” signs helps buyers—choice matters. But rising inventory can coexist with a shortage for three reasons:
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Inventory is relative. 4.4 months of supply is still below the six-month marker that’s often considered balanced. We’re closer than we were, but not there yet.
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Demand is sticky. Household formation doesn’t pause. People graduate, get new jobs, have kids, and need different spaces—regardless of where inventory sits month to month.
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Turnover is slower. Higher borrowing costs keep many owners in place. When fewer move, the pipeline of listings doesn’t refresh quickly, even if new signs pop up in the short term.
Put together, you can have more active listings than last year and still operate in a market that’s structurally undersupplied.
What This Means for Colorado Springs Homeowners
For sellers. Inventory is up, but supply remains below balanced. If your home is well-priced and move-in ready, you’re still likely to see solid demand. Expect more showings than during the ultra-tight peak, but motivated buyers are still out there.
For buyers. You’ll probably see more options than you did a year ago, and affordability is beginning to improve. Mortgage rates have recently slipped to around 6.5%, the lowest level in nearly a year, and some forecasts suggest they could average near 6.0% in 2025. Even a small decline in rates can make monthly payments more manageable and open the door for more households to enter the Colorado Springs housing market. Be ready with financing, stay flexible on must-haves, and use new listings to your advantage.
For our community. The shortage isn’t just a market statistic. It shows up in doubled-up living, overcrowding, extended renting, and homelessness. More listings alone don’t solve a long-running supply gap; it takes time for new supply to meet demand.
Final Thought: Colorado Springs Real Estate Market Outlook
We’re short on housing relative to households. Until supply catches up—and inventory holds closer to a balanced level—the market will keep feeling tight in Colorado Springs and across the country. Rising inventory is progress; closing the gap is the goal.
Have questions about the Colorado Springs housing market? The Johnson Team can walk you through today’s inventory, timing, and next steps.
