Montana’s housing market listed as least affordable in entire US — Recent reports and analyses have painted a stark picture of housing affordability in Montana as of 2024.
The National Association of Realtors came out with a report that listed Montana as the least affordable state in the entire country, based on its Affordability Distribution Curve.
See below:
Housing Affordability Index:
Metrics like these used by various economic analyses and housing market overviews suggest that Montana’s housing market has become increasingly unaffordable. This isn’t just a local concern but positions Montana as having one of the least affordable housing markets in the U.S..
When you look at income requirements, affording a typical home in Montana, which might not even be a standalone house but could include town-homes or similar, a household now needs to earn significantly over what was required just a few years ago. Income needed to buy a home in Montana has seen one of the sharpest increases nationwide, with figures suggesting an annual income well over $100,000 might be necessary for a median-priced home.
Market Dynamics:
The surge in housing prices can be attributed to several factors including an influx of out-of-state buyers, retirees, and remote workers seeking Montana’s lifestyle and natural beauty. This has driven demand, pushing prices up beyond the reach of many long-term residents or new entrants into the housing market who aren’t from higher-income brackets.
Policy and Market Responses:
There’s recognition of the issue at the state level, with legislative efforts to address affordability through funding mechanisms, zoning changes, and investment in affordable housing projects. However, the implementation and impact of these policies might take time to reflect in the market, and there’s debate over whether these measures address the root causes or merely the symptoms.
Public sentiment is pessimistic at best. There’s a clear frustration and concern among Montana residents about housing becoming a luxury rather than a basic need. Discussions range from the impact on community makeup, where only the wealthy or those with significant external income can afford to buy or rent, to the broader socio-economic effects this trend might have on Montana’s future.
While the overall trend is towards decreasing affordability, there are nuances. Certain areas or types of housing might still offer relative affordability, especially away from major urban centers or desirable tourist spots. However, the general trajectory, unless significantly altered by policy or market correction, suggests continued pressure on affordability.
The scenario here in Montana reflects broader national trends of housing becoming less affordable due to a combination of low supply, high demand, and economic factors like interest rates. Yet, our case here in the state is exacerbated by our unique appeal, leading to what some might call a real estate boom that’s outpacing income growth for many of our residents and thus resulting in Montana’s housing market listed as least affordable in entire US.
