Montana Is Now The Least Affordable State For Homeownership

BUTTE, MT - You've heard it talked about for years now: Montana is becoming so unaffordable that soon no one will be able to afford a home here. Now, we have confirmation.

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Montana, once seen a bastion of traditional values and the last best place in America, now carries a much heavier title: the least affordable state in the U.S. for homeownership.

Believe it or not, home affordability in the Treasure State has surpassed traditionally expensive states like California, making Montana's dream of owning a home increasingly unattainable.

A new analysis from the National Association of Realtors (NAR) paints a grim picture for potential homeowners in the state, revealing a post-pandemic surge in housing costs that has left residents scrambling for solutions.

How Bad Is It?

The NAR has developed a handy tool that scores states based on their average home prices compared to their median household incomes, with an affordability score below 1.0 signifying a severe imbalance between the two metrics.

As of July 2024, Montana’s home affordability score sits at a startling 0.38, a dramatic plunge from where it stood before the COVID-19 pandemic (a 0.70 score).

Montana, with its 0.38 score, has dethroned notoriously expensive states like Hawaii (with 0.44), California (scoring 0.42), and even Idaho (at 0.40), signaling an alarming trend for both current and future residents.

Don't worry, though: if it makes anyone feel any better, there's not a single state in the U.S. that is considered by the NAR to be "affordable," with all states falling below the 1.0 score benchmark.

What’s Behind the Surge?

Several factors have converged to create this perfect storm.

First, as everyone in Montana knows, the state saw a dramatic population influx during the pandemic as people fled congested cities for Montana’s wide-open spaces. Buyers from states like California, Washington, and New York brought higher salaries and cash offers, drastically inflating home prices. This external demand drove the average cost of a home in Montana to a jaw-dropping $542,400 as of July 2024—a figure unimaginable to many local buyers.

At the same time, construction costs skyrocketed, and supply chain disruptions delayed new developments, creating a severe housing shortage. As demand far outpaced supply, prices continued to climb, exacerbating the affordability crisis. Many—if not most—first-time buyers have found themselves priced out of the market entirely.

No Clear End in Sight

The current state of Montana’s housing market raises an uncomfortable question: "Will it ever improve?" Some experts are optimistic, arguing that as more remote workers settle in, demand could stabilize and eventually lead to lower prices.

However, with the average household income in Montana trailing significantly behind the rise in housing costs, the gap between what people earn and what they need to buy a home shows no sign of closing soon.

In the meantime, local and state governments are scrambling to address the issue. Montana has implemented various affordable housing initiatives, such as subsidized housing developments and incentives for new construction, but these efforts have so far been diminished by overwhelming demand. Furthermore, interest rate hikes have made borrowing more expensive, further compounding the problem.

Is There Any Hope?

Ultimately, while Montana’s housing crisis may or may not let up in the coming years, the reality is that the state has become a destination for wealthy, out-of-state buyers. And unless there is a substantial shift in both the housing market and wage growth, the dream of homeownership in Big Sky Country could remain elusive for many Montanans.

A New Housing Era

Montana’s transformation from a relatively affordable state into the least affordable in the nation is a cautionary tale for other rural regions. The affordability score of 0.38—making Montana the least affordable state in the U.S. to buy a home—highlights the severity of the issue and paints an unwelcoming picture for the future.

For now, the state's locals are left wondering how they will ever afford to stay in the place they call home, and whether Montana’s wide-open spaces will soon be filled with those who can simply pay the price.