Montana Housing Market 2022 : The Investor Perspective

Montana Housing market

Due to a combination of strong demand, constrained supply, and steadily rising home prices, the Montana housing market will continue to be robust in 2022. The average house in the state of Montana was worth $448,875 in June 2022. That represents a 25.6% year-over-year (YoY) gain, and according to Zillow, the market will continue to grow during the ensuing twelve months. By June 2023, home prices are expected to rise by 7.6% in Billings, Montana, and by 15.2% in Bozeman, respectively.

The cost of listing a home is currently significantly higher than the national average, and this trend is anticipated to continue. In Montana, housing prices will rise in the second quarter of 2023 compared to the same period last year. Montana is currently a seller’s market. Despite the high listing costs, the state’s demand is still strong, which leads to quick sales of real estate. Nevertheless, local real estate trends vary from town to town.

Although Montana’s employment growth is still slowing down, the 11,500 new jobs that have been added in the last year are a good sign. The region’s metro areas are all still adding jobs. Missoula stood out, adding 1,900 new jobs over the previous quarter. Statewide unemployment rose to 2.8% in August from 2.6% at the end of the second quarter, primarily as a result of an expanding labor force.

The lowest unemployment rate among the metro areas covered by this report was 2.6% in Billings, followed by 2.7% in Missoula and 2.9% in Great Falls. The labor force participation rate, which is calculated by dividing the civilian population by the labor force, has slightly increased to 62.7%, but it is still extremely low. This implies that hiring will continue to be a challenge for firms.

Mortgage rates

It’s crucial to look around for the best mortgage rate if you’re buying a property in Montana. Your credit score, your debt-to-income ratio, your present income, and your work status are just a few of the variables mortgage lenders consider when quoting rates. Therefore, it is best to know the in & out of mortgage and mortgage rates, specially because if you find a good deal finding the best deal, it will make your purchase easy in a long haul.

The present state of mortgage rates is still ambiguous. Investors were accused of throwing a “taper tantrum” when the Federal Reserve scaled back bond purchases in 2013, and we are witnessing a similar response now. As they use every instrument at their disposal to lower inflation, the Fed seems prepared to see the housing market suffer.

Mortgage rates are therefore not in line with treasury yields, which not only causes rates to rise sharply but also leads to erratic swings in both directions. According to the current projection, rates will reach their pinnacle in the fourth quarter of this year before beginning to gradually decline. However, they will continue to be around the 6% area through 2023.

Costs of homes in Montana

  • The average sale price of a home was $709,013, which was unchanged from the previous year. In comparison to the second quarter of 2021, prices were 0.2% lower.
  • As buyers and sellers respond to mortgage rates that are higher than they have seen in a long time, price growth will likely remain flat for the remainder of 2022 and into 2023. That Nevertheless, I do not anticipate a decline in home prices in Montana in 2023, despite greater borrowing costs and larger inventory levels.
  • Before you realize that the median listing price decreased, the data seem a little strange with pending sales up considerably but property prices practically steady. the second quarter by 8%. Due to increased competition in the market, house sellers are now forced to price their properties more aggressively.
  • Even with greater competition than in previous years, sellers who reasonably price their houses continue to find purchasers.

How will the Montana housing market be in 2022?

The report examines the real estate markets in a few counties in Montana for the second quarter of 2022 and was provided by Matthew Gardner, the head economist of Windermere Real Estate. In the last year, Montana added 15,800 new jobs, which is more than average. The metro areas of Montana have all recovered the jobs lost due to the epidemic.

The unemployment rate in Montana increased from 2.3% in April to 2.6% in June. The lowest unemployment rate was in Billings, which was followed by Missoula and Great Falls. The state’s workforce shortage worries me. Due to the low 62.6% labor force participation rate, it is challenging for businesses to find qualified candidates.

Will Montana’s housing costs decline?

  • Given the changing market conditions, it won’t be long before prices in Montana start to level down.
  • The average price of a home increased by 17.8% over the previous year to $710,428; nevertheless, this was 12.9% less than in the first quarter of 2022.
  • Although mortgage rates are rising and there is now a lot of inventory, sellers are still bullish.
  • This is demonstrated by the fact that, as compared to the previous quarter, the median list price rose in all counties except Gallatin.

Are rent costs in Montana rising?

Renters have also been burnt by the heat in this real estate market, not only potential purchasers. The average rent price across the state is rising each year. In Montana, $2,100 is the median rent for all bedrooms across all property types. According to Zillow Rentals Data, the median rent price has grown by $250 from the prior year. The national median rent is 5% higher than in Montana.

  • Based on 369 available rentals, the typical rent in Montana for August 2022 is $2,100.
  • This is $125 and $250 more than July 2022 and August 2021, respectively.
  • Montana’s typical rent is $100 less than the national average.

Financing options to purchase a home in Montana

As a real estate investor, the type of loan you select to finance your property may have an effect on your bottom line because it may alter your interest rates, down payment, and loan term. Here are a few different strategies for funding real estate investments.

Traditional loan

This traditional funding is typically provided by banks or credit unions. They require average to good credit and have consistent interest rates and flexible down payment requirements. To make sure you have enough money to repay the loan, lenders will look at your assets, tax returns, cash reserves, debt, and other eligibility criteria. After evaluating your financial situation, the lender will either accept you or refuse you.

Hard money loan

Hard money loans in Montana are more accessible since they have less eligibility requirements than conventional loans. Instead of using a person’s own income or credit history to guarantee the mortgage, the asset’s potential future profits are utilized instead. Hard money lenders in Montana will make a sizable upfront cash contribution to meet the projected market value of the property. These loans often have a short term, not exceeding a year.

Will the housing market in Montana crash?

Although there are still persistent rumors’ of a market crash, current local data do not support them. The monthly numbers show that the market has started to cool, even if it is only slightly. Homes in Montana are staying on the market for a very long time due to the rise in listing prices. If the trend persists, the inventory may keep rising and slow down market activity. There aren’t enough houses available to satisfy the demand of buyers.

Bottom line

The Montana housing market isn’t currently experiencing a significant decline in home prices or crash. The current housing supply in Montana continues to favor sellers. In July 2022, there were 44% more homes for sale in the state than the previous month. According to monthly data from, there are currently 3,918 active listings in Montana, an increase from last year.

With fewer than seven people per square mile on average, Montana ranks 44th in terms of population density despite being the fourth-largest state in the US. Despite its stunning landscapes and an abundance of natural resources, this state has more antelope and elk than people. Anyone looking to get away from the hustle and bustle of cities and breathe in the pure alpine air should consider visiting Montana.

The state of Montana’s economy is expanding quickly, which has reduced unemployment and raised wages. The state of Montana added nearly 13,000 new jobs in 2021 that paid more than the state’s median wage, according to data from the labor department. That surpassed the governor’s target of creating a net of 10,000 new high-paying jobs. The governor of Montana, Greg Gianforte, claims to have set the same objective of creating 10,000 more jobs in 2022, each paid $50,000.