Home Buying in Montana
Whether you are drawn to the rugged beauty of the Rocky Mountains, the tranquility of the Great Plains, or the charm of small-town living, Montana provides some diverse home-buying opportunities. Known for its many outdoor recreational opportunities, low population density, and tight-knit communities, "Big Sky Country," as Montana is called, offers an idyllic quality of life.
The Montana housing market has undergone some significant shifts in recent years. Between 2010 and 2022, the state's population increased each year, with more people coming to the state in search of a quieter way of life. During that time, home prices also increased, year over year, leading to Montana having a higher than the national average median home price. While the Montana housing market has shown some signs of balancing out, certain areas of the state are still experiencing tight competition and higher prices. A house may stay on the market for 60 days or more before selling in Montana.
When buying a home in Montana, it is essential you assess your individual housing needs, your finances, and partner with a knowledgeable local realtor who understands the state's unique housing market. Potential homebuyers must do their research to truly understand Montana's distinctive housing landscape and unique market dynamic, which is born from the allure of wide-open spaces and the rising demand for a more tranquil Western lifestyle.
Montana Housing Trends
It is important to consider Montana's current housing trends before buying a home in the state.
Some important trend lines to consider include:
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Montana Median Home Price
Montana's median home price is roughly $470,000, and though this is higher than the national average, it is more affordable than in neighboring states like Colorado and Washington. It is also important to note that home prices vary across the state, with popular cities with growing economies, like Missoula and Bozeman, commanding much higher sale prices.
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Number of Homes Sold
The number of homes sold in Montana has increased steadily, with a significant rise during the pandemic, as more people were drawn to remote living. On average, about 1,100 homes sell in Montana each month. However, the supply of homes in Montana has had trouble keeping up with demand, leading to a tight market.
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Median Days on Market (DOM)
In Montana, homes typically stay on the market for around 60 days. However, that time frame may be much shorter in some of the state's most popular cities, like Missoula, Helena, and Billings. The lower the median DOM, the more competitive the market is likely to be.
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Supply Statistics
Thanks, in part, to an aging workforce of tradespeople looking to retire and a shortage of contractors needed to build homes, Montana is experiencing a housing supply shortage. This limited supply of new builds is a leading contributor to rising home prices in the state and increased competition within its housing market.
How to Find the Right Home to Buy in Montana
Partnering with a real estate professional is highly recommended when buying a home in Montana. A local realtor can help you find the perfect home to fit your budget, goals, and needs. Their expertise is invaluable in navigating Montana's unique housing market and the home-buying process in general. When selecting a real estate agent, look for someone with strong communication skills, in-depth regional knowledge, experience, proper licensing, and strong references or referrals.
Finding the Right Home
Not only is having the right guidance critical to finding the right home, but it requires carefully considering the following:
Location
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Urban vs. Rural: When looking for a home in Montana, you'll find options in both urban and rural areas. In cities like Billings, Missoula, and Bozeman, residents can access urban amenities, arts and culture, and strong job markets. In contrast, Montana's more rural areas offer peace, space, and a close-knit community atmosphere. Ultimately, your location choice will depend on your lifestyle preferences and other factors, such as access to work and good schools if you have or plan to have children.
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Proximity to your favorite outdoor activities: Montana is an outdoor enthusiast's dream, offering access to hiking, fishing, skiing, and much more. If outdoor adventure is an important part of your life, you may want to consider how close you want to be to these activities when buying a home.
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School Districts: For homebuyers raising children, the quality of the local school district will be a crucial factor in their final decision. Montana has some of the most highly rated school districts in the Rocky Mountain region, particularly in Bozeman, a city recognized for having some of the best schools in the entire state.
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Property Tax Rates: Montana homebuyers must understand the state's property tax rates, which can vary from county to municipality and impact overall living costs. Although Montana's property tax rates are moderate compared to national averages, you should always research the specific market where you shop for a new home, as some communities have higher rates to help fund schools and infrastructure.
Type of Home
The type of home you buy in Montana will play a significant role in your lifestyle and can also affect your long-term investment in homeownership, so you will want to choose wisely. Consider your preferences, needs, and finances when selecting your desired home.
Here are some of the most common home types found across Montana:
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Single-Family dwellings: Single-family homes are the most common type of homes bought and sold in Montana. They typically offer plenty of space, privacy, and, often, scenic views. The downside to owning a stand-alone single-family home property is that it comes with added costs and responsibilities, especially compared to condos or townhomes.
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Condos and Townhomes: Condominiums and townhomes are less common in Montana than in other states. However, you can find them in more urbanized areas like Bozeman and Missoula. Condos and townhomes are popular among buyers looking for a lower-maintenance lifestyle and don't mind a little less space and privacy.
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Ranches and farms: If you're looking for true rural living, Montana's ranches and farms are a popular option for homebuyers. With sizable homes and large tracts of land, farms, and ranches are ideal for anyone interested in agriculture or wanting to enjoy the wide-open spaces they offer. The remote location and maintenance of such large properties can also be a real challenge, especially for those unaccustomed to rural Montana living.
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Cabins and mountain homes: Montana homebuyers often seek cabins or mountain homes, either vacation properties or full-time residences. These homes offer a peaceful retreat with direct access to nature. On the flip side, these secluded locations usually have limited access to amenities and services, which might be a drawback for some potential homebuyers.
The Home Buying Process in Montana
Montana's home-buying process is similar to other markets, but the state's unique housing market has created some unique considerations.
Here are some critical steps:
- Get prequalified for a home loan.
- Partner with a local real estate agent.
- Make an offer.
- Schedule a home inspection.
- Close on your new home.
Financing Your Home Purchase
There are several financing options available to homebuyers in Montana.
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Traditional Mortgages
Traditional mortgages in Montana can usually be categorized as follows:
- Fixed-rate mortgages: A fixed-rate mortgage is the most preferred type of mortgage among Montana homebuyers because it features a fixed interest rate, as the name implies, for the life of the loan.
- Adjustable-rate mortgages (ARM): An ARM is risky in some situations because its interest rate fluctuates based on market conditions.
While Montana homebuyers often seek traditional loans from big lenders like Wells Fargo and Bank of America, local banks and credit unions, such as First Interstate Bank and Glacier Bank, provide personalized service and tailored mortgage options catering to the unique needs of Montana residents, making them popular choices for financing homes.
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Government-Backed Loans
The federal government and the Montana Board of Housing have several loan options available to Montana homebuyers, including:
- The Regular Bond Program: This loan program targets qualifying first-time homebuyers and offers a 30-year loan with a low interest rate.
- The 80% Combined Program: This program provides qualifying homebuyers with an alternative to FHA-insured loans, thus eliminating the need for mortgage insurance. The program offers a 30-year first-position mortgage loan at 80% Loan-To-Value (LTV) and a second loan at 20% LTV through participating non-profits.
- The Montana Veterans' Home Loan Program: This Veterans Assistance (VA) program provides first mortgage funds to those who have served or are serving in the military or the Montana National Guard.
- US Department of Agriculture (USDA) loans: Certain homebuyers in Montana may qualify for USDA-guaranteed loans.
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Down Payment Assistance Programs
The Montana Board of Housing offers down payment assistance programs to reduce closing costs and initial down payments for Montana homebuyers. These programs include the Bond Advantage Program and the MBOH Plus 0% Deferred Down Payment Program.
Montana Home Insurance
Although Montana law does not require homeowners to carry home insurance, mortgage lenders usually require borrowers do so. Having homeowner's insurance in Montana is critical, particularly in areas prone to wildfires and harsh weather conditions. Montana's average home insurance premium is significantly higher than the national average, but prices will depend on the type of home you choose, its location, and coverage. Insurance costs can be markedly higher in disaster-prone areas, such as those near forests or rivers, with Montana homeowners facing premiums 20% to 50% above the state average.
Home Buying Challenges
Limited inventories, rising home prices, and competition for Montana's most desirable properties are the primary home-buying challenges. The potential for natural disasters can also impact the home-buying process and the overall cost of homeownership.
Here's a closer look at some of these critical issues:
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Limited inventory: Since there is a limited selection of homes available in Montana, particularly in some of the most sought-after areas of the state, homebuyers may find it difficult to find a property that checks all their boxes. As a result, homebuyers may be searching longer for the right property or end up compromising.
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Rising home prices: Montana's popularity among second-home buyers has been driving up prices in the state, particularly in popular areas like Bozeman, Missoula, and Kalispell, where it is becoming increasingly difficult to find more affordable options.
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Increased competition: Due to limited housing inventory and rising demand, the competition for desirable homes is often fierce. Montana homebuyers may be in a bidding war and need to act quickly. They may even be forced to make offers above the asking price to secure a property.
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Harsh winters: Montana is known for its long, harsh winters, which can impact the home-buying process in several ways. Snow and ice can make it harder to view properties, delay inspections, and complicate moves, bringing the process to a standstill. Also, Montana homes must be adapted or built to withstand extreme cold, sometimes increasing initial costs and making ongoing maintenance more expensive.
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Threats from natural disasters: Catastrophic natural events, like wildfires, can pose serious risks to Montana properties. Therefore, homebuyers must consider disaster preparedness when choosing a home. They must be prepared to pay higher insurance premiums or spend money on protective measures.
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Lack of infrastructure: In Montana's rural areas, there may be a serious lack of infrastructure, with roads, utilities, and internet access being less developed. This lack of infrastructure affects the standard of living and could require homeowners to make costly investments in septic systems, wells, or off-grid power to bring their property up to modern standards.
Embracing the Montana Dream: Embarking on Your Path to Home Ownership
Homebuying in Montana is more than making a significant financial investment in your future. It represents a distinct lifestyle choice, opting for tranquility, natural beauty, and community spirit, no matter where you live in the state, from the Rocky Mountains to the expansive Great Plains.
Although Montana's housing market has its share of challenges, from a limited inventory to rising prices and fierce competition, especially in its most popular cities, there is still plenty of opportunity for well-prepared and well-informed people to navigate it.
Whether you are drawn to vibrant urban centers like Bozeman of Missoula or the peaceful solitude of the state's rural regions, through careful research, you can understand market dynamics, find an experienced local realtor, and find a home that can meet your personal needs and lifestyle preferences to fit your vision of the American dream.
Instant Access to Montana Property Records
- Owner(s)
- Deed Records
- Loans & Liens
- Values
- Taxes
- Building Permits
- Purchase History
- Property Details
- And More!
Instant Access to Montana Property Records
- Owner(s)
- Deed Records
- Loans & Liens
- Values
- Taxes
- Building Permits
- Purchase History
- Property Details
- And More!