The median sale price of single-family homes in the Pikes Peak region reached a historic high this summer.

The hot sales market underscores the area’s exponential growth over the last decade, coupled with a shortage of available and affordable housing units to meet demand, some regional housing industry experts said.

Although ballooning sticker prices, growing insurance costs and higher mortgage rates have stoked fears among some that purchasing a home and achieving what so many consider the American Dream is now out of reach, it’s still an achievable goal for the typical buyer, the industry insiders said.

“Although it is challenging, it is still a realistic goal if you have a plan in place and create that plan with a reputable mortgage (loan officer) and … a reputable real estate agent that can help you figure out the right place for you to buy now,” said Eddie Hurt, a longtime real estate agent with ERA Shields Real Estate.

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Rising home costs

The median sale price of a single-family home in the Pikes Peak region hit a record high of $500,000 in June before it edged down slightly to $497,475 in July, according to Pikes Peak Association of Realtors market trends reports and historical data maintained by The Gazette, based on Realtors Association figures.

Compared with a median sale price of $243,000 in July 2015, it is 105% more expensive to buy a single-family home in the region than it was a decade ago, data show. Prices have increased 32% since homes were selling at a median price of $377,000 five years ago in July 2020.

Growing demand is partially responsible for the surge in local home prices, Hurt said.

“In Colorado Springs … people love to get outside and the trail systems are outstanding. I think that type of lifestyle is attractive to a lot of people, so I think that’s driving … a lot of demand. And people who do live here don’t want to leave as much,” he said.

Median wages in El Paso County have not increased faster than home prices, though households are bringing in nearly 50% more income than they were in 2015.

The median household in the county is bringing in $87,470 a year, according to 2019-2023 American Communities Survey five-year estimates, the latest data available from the U.S. Census Bureau. In 2015, El Paso County’s median household income was $60,109, The Gazette previously reported, per U.S. Census Bureau data.

Incomes generally increase faster than prices in a given economy, driven by improvements in productivity over time, said Bill Craighead, program director of the UCCS Economic Forum at the University of Colorado Colorado Springs.

A “particularly sharp rise” in housing prices and rents in the Pikes Peak region from 2020 through mid-2022 exceeded increases in income during that time, “so affordability in terms of cost relative to income is worse than it was,” Craighead said.

Home prices across the Pikes Peak region have been relatively flat since mid-2022, which “is helpful for affordability,” but surges in insurance costs — driven by severe weather and increases in labor, construction and building materials costs — and higher mortgage rates “have not been as favorable,” he said.

The average 30-year fixed-rate mortgage was 6.56% as of Thursday, according to mortgage buyer Freddie Mac, the lowest level so far in 2025. Rates have come down over the summer.

The long-term mortgage rate averaged 3.73% at the beginning of 2015, and 3.22% at the beginning of 2022, historic data from Freddie Mac show. Rates began climbing over 5% in April 2022 and have not fallen below that threshold since.

A home ownership affordability monitor from the Federal Reserve Bank of Atlanta, which estimates the monthly payment on a newly-purchased home as a share of median income, shows that 46% of household income in the Colorado Springs metro area, and in El Paso County, goes toward paying mortgage, interest, taxes, home insurance and mortgage insurance — slightly lower than the national figure of 48%.

A share greater than 30% is considered unaffordable.

In adjacent Teller County, 50% of a household’s median income is needed to cover mortgages and other associated costs, the affordability monitor shows.

When comparing affordability indexes, “The Colorado Springs metro area actually tracks the U.S. fairly closely,” Craighead said. “We’re not alone in seeing that sharp rise in housing costs (from) 2020-2022, and while houses are more expensive here than the national average, median incomes are higher here than nationally,” he said.

A lack of available housing inventory in the Pikes Peak region is also driving up local home prices, Hurt added.

“For well over 20 years, builders haven’t been building enough units for the amount of demand. That’s simple economics: a lack of inventory, and you still have the demand, something’s got to happen. Prices have to go up. So nationally, prices are going up everywhere,” he said.

In 2025, El Paso County and Colorado Springs will be about 8,709 housing units short of the estimated number of single-family homes, townhomes, duplexes, condominiums and apartments needed to meet local housing demand, according to a report released early this year by the nonprofit Pikes Peak Housing Network.

That estimate is based on a Common Sense Institute formula suggesting communities should have 10% more housing inventory beyond their existing supply, so buyers always have options.

Because new homes are more expensive to build, they’re more expensive to buy.

“Our builders are mostly building homes in the $600,000 to $700,000 range, and the vast majority of our community members can’t afford that. It’s only getting worse,” Pikes Peak Housing Network Executive Director Jill Gaebler said. She is a former development director of the nonprofit Greccio Housing affordable housing group and previously served as a Colorado Springs city councilwoman.

“For a person who wants to purchase a home today, they really need to be making about $115,000 (a year) to do that. That’s hard. That is what is creating part of our housing crisis,” Gaebler said.

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Resources, other solutions available

Building smaller houses and other types of “starter home” products like Accessory Dwelling Units (ADUs), modular homes, manufactured homes, townhomes and condominiums will help make housing more affordable for more people, Gaebler and Hurt said.

Price tags for these types of housing are generally lower than single-family homes and are the most affordable options.

“Home ownership is the best vehicle for creating wealth and retirement security,” Hurt said.

More rental units are also needed in the region to accommodate the rising number of people renting for longer periods of time, Gaebler said. The average first-time homebuyer in the U.S. in 2024 was 38 years old, compared with 35 years old in 2023, according to figures from the National Association of Realtors.

State legislators, city officials and developers are responding to these concerns in some ways.

Local developers, including Classic Homes and Vanguard Homes in Colorado Springs, are building smaller homes, Gaebler said.

The Colorado Springs City Council in March passed new rules permitting one attached or detached ADU to be built per lot in all the city’s residential zones, which expanded their use into single-family neighborhoods. This came after Colorado lawmakers passed a 2024 bill requiring major cities to expand the areas where ADUs are permitted.

Data from the Pikes Peak Regional Building Department also show it issued permits to construct 64 condos through the first seven months of 2025, the most since 201 condominiums were permitted locally in all of 2007.

New state legislation taking effect Jan. 1 hopes to incentivize developers to galvanize the affordable condo market, which supporters said died off in Colorado because of “construction defects” litigation.

If the city reconfigured its zoning rules, it could allow developers to build more “creative” housing solutions like duplexes, triplexes and modular homes, Gaebler said. Smaller minimum lot sizes, too, would mean more single-family homes could be built in one area.

Prospective homebuyers can also choose to live with family members for longer periods of time so they can save up more easily, Hurt said. They can choose to live in more affordable communities such as Security-Widefield, or even farther south in Pueblo or Cañon City and then commute north for work.

First-time homebuyer programs, the Pikes Peak Down Payment Assistance program and alternative loan options like Federal Housing Administration (FHA) and VA loans are some resources that can help buyers get into a home without needing to save for a significant down payment.

Buyers with conventional loans who put down at least 20% on a house aren’t required to carry private mortgage insurance, saving them the added expense of a monthly mortgage insurance premium. But saving approximately $100,000 to put down on the median-priced home could take years for a typical buyer, real estate experts said.

“The best place to start is with a solid conversation with somebody that folks trust,” Jamie Slevin, mortgage production manager at Ent Federal Credit Union, agreed with Hurt. “There are certain advantages for bigger down payments: better credit scores, things like that. … Everything starts with education. Once we have a good, firm grip and understanding on what the … client is truly seeking, we can give them the best advice. That might be, ‘right now is not the time to buy,’ or, based on the conversation, ‘you’d be crazy not to buy right now.'”

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A success story

Pistol Weeks, who moved to Colorado Springs from Louisiana almost two years ago, recently purchased his first home, a new build, in Banning Lewis Ranch on the city’s far east side.

The area struck Weeks and his girlfriend because of its proximity to his work, its quiet and family-friendly feel, mountain views, and because it offered more space than their apartment while still being close to dining, entertainment and other services.

When the couple began searching for a home, housing prices and interest rates were a top concern, Weeks said, but incentives from his homebuilder Oakwood Homes “helped a lot.”

“When we looked at homes, I was a little (skeptical) about what the monthly price was going to be for the mortgage. Like, can we really afford this, even together? Then we started sitting down to talk numbers about what we wanted, and it was like, this is very doable,” he said.

For example, Weeks used a qualifying $2,500 bonus incentive offered through the builder’s Hometown Heroes program to bring down his interest rate.

He also used a VA home loan to purchase the house because it afforded Weeks and his girlfriend “the best flexibility for our situation,” he said.

Weeks expects the couple to move into their first home in the fall, and he intends to stay in the community for the foreseeable future.

“I met my future wife here in the Springs, and I wanted to stay for her and build a life and family here,” Weeks said. “I love the beauty of Colorado and … also, I am an outdoorsman, so there are always new adventures within driving distance.”

Hurt suggested prospective buyers not wait for mortgage rates to come down before jumping into the market. The average rate since Freddie Mac began tracking 30-year mortgage rates in 1971 is 7.7%, he said.

“So the chances that rates are going to get down to 6% or below 6%, it’s probably not likely … If you want to do it, you should do it now,” he said. “The cost of purchasing a home right now is at or near historic highs, but it is still doable.”

Gazette reporter Alex Edwards contributed to this report.

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