Gallatin Valley housing report shows why buying a home remains hard

BOZEMAN, Mont. — A new housing report from Southwest Montana Realtors shows home prices in the Gallatin Valley remained among the highest in the state with the median home cost hovering around $800,000. 

Joanne Harper, the report’s housing chair, said improvements were happening in Gallatin County, like increased wages and slowly growing housing stock, but many people were not noticing them in daily life due to a higher cost of living. 

“Those aren't really being felt. So, we can have something that's factually true, but in practical terms it isn't really something that a person on the street or a person engaging in their first home purchase or home sale can really perceive,” Harper said. 

The report found a lot of new housing had been built, including single-family homes and apartments, but prices had not fallen. 

“It takes a long time to see policy changes and overall market conditions have an impact,” Harper said. 

Speakers at the SMR conference on Wednesday morning said the challenge went beyond the listed price of a home. They explained that taxes, escrows and interest rates had also gone up. 

“Locking in that 30-year fixed rate and thinking you're done, this is the exact payment that you will have over that course of owning that property unfortunately has changed,” economist Jessica Lautz said. 

Those combined costs had made homebuying harder, and the report said the national average age of a first-time homebuyer had risen to 40. 

Many home sellers who are looking to downsize often feel locked in by current high interest rates and capital gains taxes. Data shows that many who say they are downsizing do not actually buy a significantly smaller home, Lautz said. 

Generationally, baby boomers are the biggest homebuyers. Gen X makes up about a quarter of homebuyers. Gen Z is the smallest group of homebuyers, but they are most likely to take advantage of government programs, Lautz added. 

"They really seem to understand taking advantage of low down payment programs, FHA loans, if your local programs are available to them, they are going to look at them," she said. 

The publishers of the report said they hoped the data would help drive solutions for more affordable housing options in the Gallatin Valley. 

“There is no silver bullet to affordable housing," said Southwest Montana Realtors President Mark Corner. "The biggest thing is that we need a collaborative effort amongst a lot of different entities to make an impact on affordable housing." 

Rental stock has also increased significantly, with 7,000 units finished or in the pipeline over the last few years, he noted. However, speakers at the conference confirmed while vacancies are up and that can be good for negotiating a lease contract, there is no real impact to for-sale home prices. 

Corner's advice is to find a realtor and lender who will look for programs and help potential homebuyers put together long-term plans to make a purchase possible.