According to the Census ACS 2023, the median household income in Colorado Springs is $73,000 per year.

This is about 7% lower than the national median household income of $78,538. While the number may seem below average, when considering the income structure and cost of living in this city, a very different picture emerges.

The most prominent factor in Colorado Springs' income composition is the military-related population. With facilities like Peterson Space Force Base, Fort Carson, Schriever Space Force Base, and the NORAD headquarters, this city is home to some of the most notable military installations in the United States. Active-duty military personnel, their families, military contractors, and veteran households make up a significant portion of the total population. Military households often include non-taxable allowances such as BAH (Basic Allowance for Housing) and BAS (Basic Allowance for Subsistence), which can result in a higher actual purchasing power than reported income might suggest. This is one reason why interpreting the median income figure of $73,000 at face value can be misleading.

Looking at housing data, the median sale price for single-family homes in Colorado Springs is around $380,000 to $480,000. This is significantly lower compared to California or New York, and about 20-30% cheaper than Denver. When calculated using the price-to-income ratio, it stands at about 5-6 times, which is quite reasonable compared to the 10-15 times seen in major West Coast cities. This structure makes it an attractive factor for military families and remote workers relocating from outside Colorado.

Further examining the industry composition, besides the military, key employment sectors include cybersecurity, defense IT, healthcare, and tourism. There are also tourism-related services linked to the Pikes Peak area and ski resorts. Companies like L3Harris Technologies, SAIC, and DXC Technology provide high-income professional jobs, forming the upper end of the income distribution. In contrast, service and retail workers tend to fall below the median income.

In the rental market, two-bedroom apartments range from $1,600 to $2,200 per month. This is definitely more affordable compared to Denver. Although rental prices have faced upward pressure due to remote workers moving from Denver to Colorado Springs after the pandemic, they still remain relatively low within Colorado.

From a real estate investment perspective, data shows that Colorado Springs has had periods in the last five years where home price growth outpaced Denver. The returns have been notable due to the low starting prices, and the stable rental demand typical of military towns (from military families) reduces vacancy risks. However, during the interest rate hike phase of 2022-2023, a noticeable decline in transaction volume occurred, and the market recovery is currently ongoing.

It is true that the median income of $73,000 is lower than the national average. However, considering the effects of military allowances, relatively low cost of living, and affordable housing prices, the actual purchasing power appears to be better than the figures suggest. A more accurate approach would be to analyze the specific income composition and expenditure structure rather than judging this city based solely on income figures.