Is the Cost of Living High in Colorado?

The cost of living describes the financial outlay needed to maintain a particular lifestyle in a specific location. It encompasses the expenses for essential goods and services that individuals and households regularly incur. Understanding Colorado’s cost of living is important for anyone considering moving to the state, as it directly impacts financial planning and overall quality of life. The state’s reputation for natural beauty and outdoor opportunities often influences perceptions of its economic landscape. Examining these costs provides a clearer picture of what to expect financially.

Understanding Cost of Living Metrics

The cost of living is typically measured by comparing the prices of a standardized set of goods and services across different geographic areas. These comparisons often utilize various indices, such as the Consumer Price Index (CPI) or specific cost of living indices from organizations like the Council for Community and Economic Research (C2ER).

Key components that comprise these indices include housing, transportation, food, healthcare, utilities, and miscellaneous goods and services. Housing costs, including rent or mortgage payments and property taxes, usually represent the largest portion of a budget. Transportation expenses cover vehicle ownership, fuel, and public transit. Food costs encompass groceries and dining out, while utilities include electricity, natural gas, water, and internet services. Healthcare expenses cover insurance premiums and out-of-pocket medical costs.

Breakdown of Major Expenses

The median home price in Colorado was approximately $621,800 as of April 2024, reflecting a 7.4% increase from the previous year. For renters, median rent for a one-bedroom apartment in Boulder was about $1,530 in December 2024, and a two-bedroom apartment was around $1,909. Overall, housing costs in Colorado are notably higher than the national average.

A single adult in Colorado might expect to spend over $9,000 per year on transportation. In Denver, residents spend about $590 on auto loans and $221 on auto insurance monthly. Average gasoline prices contribute to daily commuting costs. Public transportation options exist in major cities, such as the Denver RTD, which offers monthly passes, but personal vehicle ownership is often necessary in many parts of the state.

The estimated grocery bill for an average family of four in Colorado is around $1,366 per month. For a single person, the average non-restaurant food cost is estimated at about $410 per month.

The average monthly utility bill in Colorado ranges from approximately $331 to $370, covering water, electricity, gas, and internet. Electricity bills for residential customers average around $147 per month, which is lower than the national average. Internet services in Colorado generally align with the national average monthly cost of $70.

The average cost for Marketplace benchmark health insurance in Colorado was approximately $451 per month in October 2024, which is slightly less than the national average. Individual health insurance plans in Colorado may cost between $380 to $405 per month for an unsubsidized plan. Overall, healthcare costs in Colorado are about 4% higher than the national average.

Geographic Variations Within Colorado

The cost of living is not uniform across Colorado, with significant differences depending on the specific location. Major metropolitan areas, such as Denver, Boulder, and Fort Collins, typically have higher living expenses compared to other regions of the state. For instance, Boulder is considered one of the most expensive cities, with its cost of living being 32% higher than the national average and 20% more than the average Colorado city. The median home price in Boulder can exceed $1.2 million for a single-family home.

In contrast, cities like Colorado Springs and Pueblo generally offer a more affordable lifestyle. For example, the median listing price for homes in Colorado Springs was around $455,000 in April 2024, considerably lower than in Denver or Boulder. Grand Junction also presents a more moderate cost of living. Mountain resort towns such as Aspen and Vail are known for their extremely high costs, particularly for housing, due to limited supply and high demand driven by tourism and amenities.

Factors contributing to these regional differences include population density, the strength of local job markets, and the presence of tourism. Areas with robust economies and high demand for housing, such as Denver, experience increased property values and rental rates. Strict building regulations and limited land availability, as seen in Boulder, can also constrain housing supply, driving up costs. Conversely, regions with slower growth or different economic drivers may offer more accessible prices.

Comparing Colorado to Other States

Colorado’s overall cost of living is higher than the national average. It is approximately 7% to 13% more expensive to live in Colorado compared to the average U.S. city. This ranking places Colorado as the 9th most expensive state in the U.S. for household bills.

Housing is a primary driver of this higher cost, with expenses being about 14% to 20% above the national average. For example, the median home sale price in Colorado ($621,800 in April 2024) is significantly higher than the national median existing-home sale price of approximately $384,500. Similarly, average monthly rent in Colorado is higher than the national average.

While some costs like utilities can be lower (around 9% to 14% below the national average), other categories like groceries and healthcare are generally higher. Groceries in Colorado are about 2% higher than the rest of the country, and healthcare services are approximately 4% higher.