If you want to understand why homes in Colorado Springs cost what they cost right now - not the feel-good version, not the political version, just the mechanical version - you only need one chart.
Monthly PITI estimated on median close price, 10% down, 30-year fixed at the prevailing rate, local tax rate, $3,000/yr insurance. M2 from FRED. Data: elevateMLS, FRED.
The blue line is the estimated monthly cost of buying the median-priced home in the Pikes Peak MLS region - principal, interest, taxes, and insurance. The red dashed line is M2 money supply - the total amount of money circulating in the U.S. economy.
In January 2020, the monthly payment on a median home here was about $1724. M2 was $15.4 trillion. Then the spigot opened.
Between January and April 2020, M2 jumped 10.4% - roughly $1.6 trillion injected into the economy in 90 days. This was bipartisan monetary policy. Stimulus checks, PPP loans, emergency lending facilities, quantitative easing. Both parties supported it, and whatever you think of the decision, the housing consequences were immediate and measurable.
Rates dropped below 3%. Prices surged. By mid-2021 the median home here had jumped from $325,000 to $439,000 while rates sat at record lows. The monthly payment went from ~$1724 to ~$2104 - still manageable because the rate compression absorbed the price increase.
Then rates normalized. Prices didn't.
That's the story of 2022 through today. M2 plateaued and even contracted slightly through 2023 as the Fed tightened. But home prices - which had already absorbed all that new money - stayed elevated. They didn't crash. They barely dipped. And when rates jumped from 3% to 7%, the monthly payment exploded.
The peak payment hit $3378/month in 2023-10 - nearly double the pre-COVID level on what is essentially the same house.
Today we're at roughly $2870/month for the median home at current rates. That's 66% higher than January 2020. The house didn't get bigger. The lot didn't get better. The money just got cheaper and then more expensive, and the price never came back down.
Notice how the two lines track each other. When M2 surged, payments stayed low (because rates fell with the stimulus). When M2 flattened, payments spiked (because rates rose but prices held). The money supply is the underlying force - interest rates and home prices are just how it shows up in your monthly budget.
M2 is currently around $22.7 trillion and climbing again - slowly. It's been rising since late 2023 after the brief contraction. That tells you something: the conditions that created the price level aren't reversing. The money that went into the system is still there. Prices reflect that reality.
Want to know where the housing market is headed? Follow the M2.
If you're waiting for prices to return to 2019 levels, the M2 chart explains why that's unlikely. The money supply would need to contract by 30-40% - something that hasn't happened since the Great Depression and that no policymaker is pursuing.
If you're hoping rates will drop enough to make current prices comfortable, watch M2 alongside the Fed funds rate. Rate cuts with stable M2 would compress payments back toward the $2,200-2,400 range. Rate cuts with M2 expansion could push prices even higher - giving you a lower rate on a more expensive house.
The path to affordable housing in Colorado Springs runs through either meaningful rate relief, income growth that catches up to prices, or - and this is the uncomfortable one - a recession significant enough to force both prices and rates down simultaneously. None of those are things you can control. What you can control is understanding the math before you make a decision.
See the full cost breakdown with live payment and affordability data here.
Data sourced from elevateMLS (Pikes Peak region median close prices), FRED (M2 money supply and 30-year fixed mortgage rates), and El Paso County Assessor (tax rates). Monthly payment estimated using 10% down payment, 30-year fixed rate, actual local tax rate (0.52%), and $3,000/year insurance. This is market commentary, not financial advice.
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