Montana’s housing shortage continues to drive prices higher.

There’s been a lot of talk about whether the housing market is cooling down or if builders are finally catching up. But when you look closely at the data, especially over time, the story is clear—we’re not out of the woods. While new home construction is improving, it’s still insufficient to close the massive gap created by years of underbuilding. The demand for homes continues to outpace supply, and here in Montana, that imbalance keeps prices strong and the market active.

Builders are not overbuilding; they’re catching up. Back in the early 2000s, home construction in the U.S. was running strong, often exceeding 1.6 million new homes per year. But after the 2008 housing crash, those numbers dropped drastically and stayed low for more than a decade. Even in 2024, with over a million new homes expected to be completed nationwide. However, that’s only a modest increase and is still below what’s needed to close the supply gap. Montana has felt this pressure firsthand. In growing areas like Flathead County, demand remains steady, but there simply aren’t enough homes on the market to keep up.

Because of the shortage, buyers are considering multi-generational living, staying in rentals longer, or moving to less competitive areas.

New homes are hitting the market, but not fast enough. Today’s inventory of completed new homes is the highest it’s been in more than 15 years; it recently hit 119,000 units, the highest since 2009. At first glance, that looks promising, but that doesn’t mean we’ve solved the problem. When you compare it to the extreme lows after 2012—when inventory fell below 40,000—you will see how deep the supply shortage still is. That shortfall built up over more than a decade, and it’s still affecting local markets. In Montana, buyers are adjusting by considering multi-generational living, staying in rentals longer, or moving to less competitive areas.

Prices remain strong due to continued demand. High demand and tight supply keep home prices firm. Even if builders keep this pace, it will take years to meet today’s needs, let alone make up for the past. This is why I expect the Montana housing market to stay strong well into 2025. If you’re a buyer, acting sooner can help you avoid rising competition. And if you’re a seller, you’re still in a market that works in your favor.

If you’re thinking about buying, selling, or investing, now is the time to make informed decisions. I’d be happy to walk you through the latest numbers and what they mean for your goals. Call me at 406-837-5531 or send an email to ScottHollingerMT@gmail.com. You can also visitwww.flatheadrealestate.com to get started.