COLORADO SPRINGS — Researchers analyzed Colorado Springs’ rent and the impact the economy has on those prices including a rise in rent costs and demand for apartments as mortgage rates and inflation continues to rise, according to a new study.

The report by the University of Denver’s Daniels College of Business states that the average rent rose by $72.81 from the first quarter, making the average rent in Colorado Springs $1,570.65. That increase also represents a yearly increase in rent from 2021 by $142.07.

The median rent increased by $68.46 with a yearly increase of $156.16. Median rent is higher, which according to the Daniels College of Business, means that there are more units with rent greater than the average, showing lower rent units are now trending upward.

“We watch this relationship because older and less expensive unit owners tend to take a cue from others in raising rents,” said Ron Throupe, the Author of the report and Associate Professor of Real Estate at the University of Denver’s Daniels College of Business. “Suggesting increases in the lower half of the rental rate market may continue to follow a rental trend upward in later quarters this year. The second quarter tends to have a seasonal rent increase and typically the lowest vacancy rate for the year. This positive rent quarter, after last quarter and a record-setting 2021 for overall rent increases shows that rental demand continues. Expectations are for additional rent growth with the traditionally strong, upcoming third quarter.”

Throupe said that current inflation and higher mortgage rates are keeping people from buying single-family homes, sustaining demand for apartments.

“The combination of higher mortgage rates and home prices affect affordability, resulting in favorable apartment living as an alternative housing choice,” said Throupe.

According to the study, the vacancy rate was 4.25%, which is a decrease from last year and that means the apartment market is tight, with only 62 new units added this quarter.

“Second quarter was as expected both with increase rental rates and decreased vacancy due to seasonal movement,” says Laura Nelson, Executive Director of the Apartment Associate of Southern Colorado. “New supply may be added slowly for various reasons so the usual increase in vacancy may not be as high. Demand for rental units continues to increase due to the bump in interest rates and home prices continue to be high.”