Montana Housing Report
Posted: July 9, 2025Author – Ryan Palma Owner/CEO Sustainable Lumber Co.
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At Sustainable Lumber Co., we understand that flooring is just one piece of the homeownership puzzle. As a Montana-based company deeply rooted in residential construction and interior design, we keep a close eye on local housing trends that impact both our customers and partners. Whether you’re a builder, renovator, or homeowner, understanding the broader real estate landscape can help guide your project planning, budgeting, and long-term investment decisions. That’s why we’ve compiled this in-depth 2025 Montana Housing Report—to offer a clear snapshot of current market conditions, upcoming shifts, and how they may affect everything from rental demand to renovation opportunities.
Montana Housing Report
Section 8 Voucher Waitlist Reopens: The Montana Department of Commerce reopened the Housing Choice Voucher (Section 8) waitlist on July 7, 2025, after an 11-month closure. This program provides rental subsidies for low-income families, the elderly, and people with disabilities. The Helena Housing Authority’s executive director, Michael O’Neil, noted that previous voucher amounts were insufficient for Montana’s high housing costs, but a successful statewide appeal to the U.S. Department of Housing and Urban Development for fair market rent adjustments has made the program more viable. Affordability and limited housing supply remain significant challenges.- Flathead Valley Market Thawing: In northwest Montana, particularly the Flathead Valley, the real estate market is showing signs of recovery. Inventory is expanding, and homes are selling faster than last year. For example, in Whitefish, the average days on the market dropped to 83 in May 2025 from 198 in May 2024, and in Columbia Falls, it fell to 84 from 111. Kalispell saw a slight increase to 117 days from 103. Despite high home prices and mortgage rates around 6.8%, reasonably priced homes are attracting multiple offers. Developments like the Kalispell North Town Center are adding commercial and residential units, with 2,000-square-foot homes listed around $500,000.
- Bozeman Rental Market Shifts: Bozeman’s rental market is cooling due to a surge in new apartment construction. Since 2021, 3,042 rental units have been built, with over 1,000 completed in 2024 and more than 4,000 in the planning pipeline. This oversupply has driven down rental prices, particularly for new units, with tenants renegotiating leases for significant savings. The median price for a single-family home in Bozeman dropped 6.7% to $765,000 in May 2025 from May 2024, indicating a broader market slowdown.
- Property Tax Changes and Valuations: Montana’s new property tax code, including House Bill 231 and Senate Bill 542, introduces a homestead exemption to lower tax rates to 0.76% for primary residences and long-term rentals (properties rented for at least 28 days for seven months a year). However, second homeowners and short-term rental owners face an average 68% tax increase over the next two years. Updated property valuations, reflecting home value growth from 2022 to 2024, were mailed to owners in early July 2025, with a 30-day appeal period. These changes aim to ease the tax burden on primary residents but may impact vacation home and rental markets.
- Gallatin County Market Stabilizes: The 2025 Gallatin Valley Housing Report indicates a stabilizing market, with the median single-family home price reaching a record $810,000 in 2024, up 3% from 2023. Sale volumes remained nearly flat (1,051 in 2024 vs. 1,046 in 2023), and in-migration has slowed post-pandemic. The market remains high-cost with limited affordable options, frustrating buyers seeking lower-priced homes.
- Youth Housing Initiatives: A Montana nonprofit, Homeword, in collaboration with Missoula County, is addressing youth housing instability after a report highlighted vulnerabilities among foster care and justice-involved youth. The University of Montana’s Rural Institute for Inclusive Communities found that these groups face significant barriers to stable housing. Homeword received a grant to develop targeted housing projects, with plans for a loan to invest in solutions once the report is approved.
- Market Forecasts and Affordability Concerns: A long-term forecast suggests Montana’s median home price could hit $932,000 by 2030, requiring households to earn 144% more than current incomes to afford homes. In Great Falls, realtors predict a 5-8% price increase in 2025 due to low inventory, despite a statewide cooling trend. High mortgage rates (around 6.8%) and limited supply continue to challenge affordability, particularly in scenic areas like Bozeman and Missoula. Reports suggest bargains are emerging in Big Sky and Whitefish, with rising inventory offering opportunities for buyers.
- Statewide Trends: Montana’s housing market is described as cooling but not crashing. Legislation passed in 2023 to ease affordable housing construction led to a surge in housing permits in 2024, contributing to falling costs in 2025, particularly in rentals. However, the state remains one of the least affordable due to pandemic-era demand and limited supply. A report from Money Inc. claims Montana is still relatively affordable, but local realtors and residents argue that rising prices outpace wages, especially in urban and tourist-heavy areas.
Summary and Outlook: Montana’s housing market is at a crossroads. While rental prices in areas like Bozeman are declining due to new construction, home prices remain high, and affordability is a persistent issue. Tax reforms aim to support primary residents but may deter second-home buyers and short-term rental investors. Inventory is slowly increasing, particularly in northwest Montana, offering hope for buyers, but high mortgage rates and projected price growth by 2030 pose challenges.
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