A string of reports released this year, including one from the Colorado Chamber Foundation and a joint study from the Colorado Space Coalition and McKinsey & Company, warned that Colorado's aerospace and defense industry is losing ground to states like Virginia, Oklahoma, Texas, and Florida. Cost of living came up repeatedly as a reason. Colorado placed 25th overall in CNBC's 2026 America's Top States for Business ranking, down sharply from 11th the year before, and landed 49th out of 50 states specifically on cost of living, the second most expensive state in the country behind only California.
That number gets repeated often, so it's worth understanding what's actually driving it, and where it does and doesn't apply.
It's not groceries. Denver and Colorado Springs both sit close to the national average on food costs, within a couple percentage points either direction. It's also not wage stagnation. Recent research from the Kansas City Federal Reserve found Colorado's wage growth has actually outpaced much of the country in the past few years, averaging around 6 percent, so paychecks aren't the piece falling behind.
What is pulling the ranking down is home values and insurance. Colorado's statewide median home price sits around $606,500, and the state carries the fourth most expensive homeowners insurance in the country, driven mainly by hail losses rather than wildfire. Property tax bills have also jumped recently, not because the tax rate rose (Colorado's effective rate is actually below the national average) but because home values, and the assessments tied to them, climbed so quickly.
Here's the part that gets lost when one statewide number gets quoted: Colorado isn't a single housing market. The $606,500 figure is weighted heavily toward Denver and Boulder, where the median home price runs $560,000 to $580,000. Colorado Springs and El Paso County look different. The local median home price was around $470,000 in August 2026, actually down slightly from a year earlier, a gap of well over $100,000 compared to Denver. Utilities tend to run lower here too, since Colorado Springs Utilities generally comes in under the combined Xcel Energy, Denver Water, and Denver Wastewater bill Denver residents pay, and local mill levies are relatively light.
Look at specific communities within El Paso County and the picture gets even clearer. Fountain's typical home value is running around $393,768. Security-Widefield sits close behind at roughly $379,000 to $380,000. Both are currently below the national median home price of $408,475 as of August 2026. A "49th in the country" statistic doesn't leave much room for the idea that a buyer could be shopping below the national average and still be in Colorado, but in parts of El Paso County, that's exactly where the market sits right now.
None of this erases the real pressure points. Homeowners insurance is a statewide cost that El Paso County shares with the rest of the Front Range, hail doesn't check county lines. And the deeper questions behind Colorado's aerospace competitiveness concerns, things like manufacturing capacity, supply chain depth, and last year's decision to relocate U.S. Space Command headquarters to Huntsville, Alabama, aren't solved by a lower median home price either.
But when a statewide ranking gets treated as shorthand for "Colorado is unaffordable," it's worth asking which Colorado that statement is actually describing. Not all of Colorado is the same. For buyers, employers, and relocating families looking at the Pikes Peak region specifically, the number that matters isn't the state average, it's the market they're actually buying into.
Sources
- Colorado at risk of being eclipsed by other aerospace hubs, reports warn (The Denver Gazette)
- New Colorado Space Coalition Study Highlights Opportunities To Strengthen The State's Aerospace Economy (Denver Metro Chamber)
- Colorado is No. 25 on Top States for Business 2026 (CNBC)
- Colorado Chamber Continues Work to Improve Competitiveness Following Drop in CNBC Rankings
- Colorado Just Ranked Among the Worst States in America for Cost of Living (Yahoo Finance)
- 2026 Colorado Tax Rankings (Tax Foundation)
- How Has Real Wage Growth in the Rocky Mountain Region Outpaced Other States? (Kansas City Fed)
- Cost of Living in Colorado (2026) (SoFi)
- Hail, not wildfire, driving largest increase in Colorado's homeowners insurance premiums (CPR)
- Cost of Living: Colorado Springs vs Denver in 2026 (iHaul iMove)
- Mill Levies (El Paso County Treasurer)
- Colorado Springs Housing Market in 2026 (Great Colorado Homes)
- Median Home Price By State In The U.S., September 2026 (Forbes Advisor)
- Security-Widefield, CO Home Values (Zillow)
- Fountain, CO Housing Data (Repit)
- Space Command is leaving Colorado. Are more losses ahead? (KUNC)
