Population Growth and Housing Supply/Demand Imbalance

Montana's population has been steadily increasing long before the popular American television show Yellowstone aired. From 2010 to 2020, the state's population grew by nearly 10 percent, while the housing supply grew by only 7 percent. This supply-demand imbalance was even more pronounced during the COVID-19 epidemic.Between 2020 and 2023, Montana's population grows again by nearly 5 percent.

The local real estate market has changed dramatically as a result, and Homes of Big Sky Realtor Kristin Campbell notes, “There's been a huge influx of out-of-staters, and many buyers are dealing in straight cash.” These newcomers, primarily from high-priced areas on the West Coast, are using their existing assets to purchase Montana real estate at higher prices. In addition, the popularity of remote work models has attracted many white-collar workers to move their work and life here.

 The Bridger mountain range in Bozeman, MT.(Getty Images)

The attraction and pressure of natural beauty and high home prices

Montana is known for its vast natural beauty and year-round outdoor activities. From skiing in the winter to fishing and hiking in the summer, it is an ideal destination for year-round travel. However, this attraction also drives up the cost of living.

Over the past five years, the median list price of a home in Montana has risen 85 percent, making it the fastest-growing state in the country. In October of this year, the median home listing price reached $646,975, the fifth highest in the nation behind Hawaii, California, New York and Massachusetts. And the average price of $318 per square foot topped all inland states.

Not only in urban areas like Bozeman, but Missoula, Kalispell, Helena and Breathitt have seen even more dramatic price increases, up 66 percent, 85 percent, 91 percent and 92 percent, respectively.

Young Residents' Survival Dilemma

Soaring home prices have been a boon to existing homeowners in terms of asset appreciation, but a heavy burden on millennials. Many families have lived in Montana for generations, but today's younger residents, especially first-time homebuyers, are facing unprecedented pressure.

According to an analysis by Realtor.com®, Montana is one of the least affordable states for housing in the United States. Kristen Campbell said, “First-time homebuyers are almost impossible. I have two sons, ages 33 and 29. They can't buy a home without a lot of support from their families. It's ridiculous.”

Nick Zimmer of Crosscurrent Real Estate mentioned that the surge in the cost of living has forced some younger residents to move to other states in search of more affordable housing. “The cost of living in Bozeman is so unbearably high that some people have decided to leave,” he said.

Montana's population boom and soaring home prices are a double-edged sword. While economic growth and a booming real estate market are encouraging, failure to address housing affordability could lead to a labor exodus and increased social inequality.

Moving forward, Montana needs to balance development to ensure natural resources are harmonized with social needs to create a sustainable home for all residents.