What Would It Take to Get the Colorado Springs Market Moving Again?

I was having a conversation with an agent colleague this week about a complex question: what actually moves a housing market? I suggested that even a hypothetical $100,000 price drop, at today's rates, would not unlock much. At these rates the payment on an average Colorado Springs home would still sit north of $2,600 a month. Here is the data behind that view.

First, the monthly payment

These are live outputs from our PCS home calculator, run on a VA loan at $0 down with the funding fee financed, today's reported 30-year rate near 6.9 percent, and Colorado Springs tax and insurance.

Start at $455,000 and take a full $100,000 off, down to $355,000, and the payment only falls from $3,381 to $2,671. It is still north of $2,600 a month. A six-figure price cut moves the payment by about $700. That is real money, but it is not the kind of move that brings buyers flooding back.

Payment is only half the question. The other half is velocity.

Velocity is how many homes actually change hands. It is the number that tells you whether a market is moving. Colorado Springs closed about 19,300 homes in 2020. In 2025 it closed about 13,300. That is roughly 6,000 fewer sales a year, a drop of about 30 percent. The market did not stop. It slowed by nearly a third.

When you line sales up against affordability across the last twenty years, a clear pattern appears. This market clears the most homes when the monthly payment sits around 28 percent of the local median income. In 2020, at its peak of 19,300 sales, the payment was 27.7 percent of income. Today it is closer to 40 percent, and sales have fallen to 13,300. The further the payment climbs above that 28 percent line, the fewer homes trade.

So where would price or rates have to be?

To pull the payment back down to that 28 percent line at today's income, you need one of these paths:

• Price alone: the median would have to fall to about $309,000. Against a closed median near $460,000, that is a 33 percent cut, not a $100,000 one.
• Rate alone: the 30-year rate would have to fall to about 3 percent, which is where it sat during the 2020 peak.
• Or split the difference: take about $75,000 off the price, to roughly $385,000, and bring the rate down to 5 percent. That combination lands the payment near $2,160 a month, about 29 percent of income, right back at the line where this market moves.

That third path is the realistic one, and it is the point. No single lever gets there at a size anyone is forecasting. A $100,000 price cut on its own is about a 22 percent drop, and at today's rate it only pulls the payment to roughly 32 percent of income, still above the clearing line. A moderate move on both sides, price and rate together, is what does the job. Velocity comes back when the payment does, and the payment needs help from both.

One note on the two models above. The payment ladder uses a VA loan at $0 down, which is how many of our buyers purchase here. The velocity math uses standard financing and payment-to-income, which is the cleaner way to compare across twenty years. They rest on different down payment assumptions, but they tell the same story.

What this means

Lower prices help affordability at the margin, and a buyer who needs to move should absolutely shop a softer market. But if the question is what brings velocity back, the honest answer is that it is a rate story first and a much deeper price story second. A $100,000 cut does not unlock too much of the same, because the payment is still too far above the line where Colorado Springs clears homes.

You can model any of this yourself. Try your own price, rate, and down payment on the PCS home calculator, or see the full history of sales against affordability on the market velocity page.

Sources: closed sales from El Paso County and ELEVATE MLS records, median income from the Census ACS series, and the reported 30-year average rate. Velocity and restore figures are computed from annual data, 2006 through 2026. Monthly payments are from the shouldimovenow.com PCS home calculator. Prepared by Rob Thompson, Realtor, Iconic Colorado Properties.