The cost of living in Colorado Springs surged to a 23-year high in the first quarter as home prices continue to climb amid a hot housing market, a national survey showed.
The local cost of living was 102.9% of the national average in the January-to-March quarter, up from 99.9% of the average a year earlier and the highest level the quarterly index has reached since mid-1997, according to the Council for Community and Economic Research. The index has been higher than the national average for each of the past four quarters and has risen sharply in the past four years.
The data was collected in early January and thus doesn't reflect the slowdown in the nation's economy that began with government orders that closed many businesses in late March to slow the spread of the COVID-19 virus. The group said in April that it will not collect data for the second quarter "to ensure the safety and well-being" of those collecting the data. The next measurement will happen early next month and will be published in late October.
Most of the first-quarter increase was driven by components measuring housing and transportation. The housing component rose from 98.5% of the national average a year ago to 104.7% in the first quarter. Transportation costs jumped from 96.1% to 109.2% of the national average during the same period. The two factors account for 36.7% of the overage average. Components measuring groceries and utilities rose slightly, while components measuring health care and miscellaneous goods and services fell slightly during the same period.
"This isn't a huge surprise, especially with Colorado Springs ranking as one of the nation's hottest housing market in recent years. That is likely to continue because the people who are losing their jobs weren't home buyers for the most part; most were renters," said Tatiana Bailey, director of the University of Colorado at Colorado Springs Economic Forum. "A higher cost of living is a byproduct of the last few years of very strong economic growth."
The cost of a four-bedroom, two-bathroom house in Colorado Springs rose 11.1% from a year earlier to $368,786, compared with a 1.6% increase in the median price nationally. The local price of a gallon of unleaded regular gasoline, meanwhile, jumped 38.2% in the past year to $2.64, catching up with the national average after dropping to 25 cents below the average a year earlier, according to charts from GasBuddy.com, which tracks gas prices across the nation.
Living costs in Denver in the first quarter remained unchanged from a year earlier at 111.1%, while costs in Pueblo rose to 94% of the national average from 93.7% a year ago and costs in Grand Junction fell to 99% of the national average from 100.3% a year earlier. Nationwide, New York had the highest cost of living at 245.7% of the national average and McAllen, Texas, had the lowest at 75.2%.
The council's index compares prices for 60 goods and services used or purchased where managers and professionals live in 257 metro areas. It's designed to help managers compare living costs when moving to another city.