What goes up must come down is something that applies to gravity and the housing market in Montana. And while Montana residents have had housing prices and affordability at the top of mind for at least three to five years, economists say that while the prices are coming down, they’re moving slowly.
That means that housing remains a stubborn problem unlikely to get solved anytime soon without seismic shifts in the market or supply because the average home price still far outpaces the average resident’s ability to pay.
During the semi-annual tour around the state of the Bureau of Business and Economic Research at the University of Montana, economists said that while there’s room for more optimism in 2026, the reality is different: Home prices have remained steadily out of reach.
In-migration to Montana — that is, the number of people moving in from out of state — has softened back to levels more typical before the COVID-19 pandemic. However, while the demand has subsided, the home prices during those intervening years have risen faster than the average resident can keep up. Coupled with stubborn, but stable mortgage rates predicted for the next couple of years means that most economists expect to see some falling prices, but not nearly enough to wipe away the problem of affordable housing.
During 2017 to 2025, most housing prices in the state doubled, according to Derek Sheehan, an economist at the BBER.
“The places that were growing the fastest are also showing signs of cooling,” Sheehan said.
A select handful of areas had property values that fell below the average rate of gain. Those areas include Jefferson, Granite, Stillwater and Ravalli counties, the Daily Montanan reports.
Sheehan said for many counties, an average of a 1% increase in housing prices and wage growth has translated to slightly more affordability, but not enough to turn the tide.
As housing goes, so too does rental housing, according to several data points shared at the meeting. Even though some of the rental market has cooled, most of the larger areas continue to see upward pressure on the housing market, with the exception of Gallatin County, which saw rental rates decline.
Rent in Gallatin County peaked in early 2025, at around $2,100 per month on average, but has since subsided a little. Cascade and Yellowstone counties were nearly identical as rents continue to increase to an average of around $1,300.
“One of the reasons that rent has not slowed down is because of the shift in the groups,” Sheehan said.
Many of the people who would have been moving from renting to owning a house have been unable to afford a mortgage. That has meant more renters while rental units have lagged behind demand, leading to increased rates.
For example, in Montana’s largest county, Yellowstone, the largest group of renters made less than $40,000 in 2021. In 2024, the largest group of renters had an income from $40,000 to $80,000.
However, the news is not all gloomy for those who are house hunting. Even though many who own their own home are “landlocked” — meaning they’re either satisfied with their housing or won’t move because of the extra cost and higher interest rates — Sheehan said the Baby Boomer generation will eventually move from single-family housing to something else, creating more housing inventory.
Sheehan provided a three-year outlook for housing in Montana that looks very similar, and could vary little because the housing market in some places like Gallatin, Missoula and Flathead County has been very volatile.
“There are challenges ahead, but we’re improving,” Sheehan said.
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