Gallatin Valley Housing Market Report 2025: Finding Balance in a Changing Market

The Gallatin Valley housing market has always been a dynamic one, shaped by strong economic growth, population shifts, and the natural beauty that draws people here from around the country. As we move further away from the pandemic era and its dramatic housing disruptions, new patterns are emerging. The 2025 Gallatin Valley Housing Report, published by the Gallatin Association of REALTORS®, gives us a data-driven look at where we stand today and what challenges and opportunities lie ahead.

This year’s report shows a market in transition: still strong, but marked by high costs, slower sales growth, and significant affordability pressures. Below, we’ll unpack the major takeaways and explore what they mean for buyers, sellers, and the community.

Economic Strength Continues to Drive Housing Demand

Gallatin County remains the economic heartbeat of Montana, and that strength directly fuels demand for housing. Job growth here has consistently outpaced both the state and the nation. Before the COVID-19 downturn in 2020, employment in Gallatin County was growing at more than twice the pace of Montana and the U.S. overall. After the temporary dip, the rebound has been even more dramatic.

The job growth is broad-based, coming from industries as varied as:

Tourism and hospitality – boosted by Yellowstone visitors, BZN airport expansion, and outdoor recreation.
Construction – feeding both commercial and residential growth.
Health care and professional services – responding to a growing and diversifying population.
Tech and advanced manufacturing – small but rapidly growing, adding higher-paying positions to the mix.

Unemployment fell below 2% in 2023, one of the lowest rates in the state. This has created labor shortages that affect everything from restaurants to construction sites, further tightening the housing supply chain.

Perhaps most importantly, incomes are rising. Gallatin County’s median household income (MHI) surpassed $90,000 in 2023, making it the highest in Montana. That increase reflects both strong local wages and the in-migration of professionals who bring remote or out-of-state incomes with them.

Demographic Shifts Shape Demand

Population growth remains strong, though it has cooled since the peak years of 2020–2021. Net in-migration from outside Montana remains a major driver of housing demand, even as some residents leave Gallatin County for more affordable parts of the state.

The age distribution of the county shows several distinct patterns:

A large share of young adults connected to Montana State University in Bozeman.
A steady base of working-age families moving into the valley for jobs or lifestyle.
A modest but growing retirement-age population, many of whom relocate for Montana’s outdoor appeal.

Another notable shift is in household composition. Over the past decade, the share of single-person households has declined, while family and nonfamily multi-person households have increased. Rising housing costs are almost certainly a factor, as more people share living arrangements to manage expenses.

Housing Stock and New Construction

Gallatin County had 55,589 housing units in 2023, with around 10% vacant or used seasonally. While single-family detached homes continue to dominate, the last two years have seen a notable rise in multi-family housing. Developers are increasingly turning to duplexes and small apartment complexes to address affordability needs and growing rental demand.

In 2024, 1,706 new housing units were permitted across the county. Bozeman focused heavily on multi-family projects, while Belgrade leaned more toward single-family construction. This division reflects different community growth patterns: Bozeman addressing density and affordability, Belgrade responding to family-oriented demand.

Construction costs remain a challenge. Prices for most building materials rose in 2024, and labor shortages keep costs high. The cost of building single-family homes has escalated significantly, while larger multi-family projects have managed to keep per-unit costs somewhat lower.

Home Prices and Market Trends

Gallatin Valley’s housing market is still among the fastest-appreciating in Montana:

Since 2000, home prices have quadrupled, far outpacing income growth.
In 2024, the median single-family home price reached $810,000, the highest ever recorded.
Growth slowed to just 3% last year, compared to double-digit increases during the pandemic boom.

This slowing doesn’t mean prices are falling — it means the market is cooling into a new equilibrium. Sales volumes stayed relatively flat between 2023 and 2024, indicating that while demand is still present, higher prices and borrowing costs are keeping activity muted.

Certain trends stand out:

Townhome sales are rising, showing buyers are looking for more affordable options.
Luxury condos in downtown Bozeman are influencing price-per-square-foot averages, pulling them higher.
Communities like Three Forks and Belgrade, once seen as affordable alternatives, are quickly catching up in price.

The Affordability Crisis

Affordability remains the biggest concern. HUD’s Housing Affordability Index shows:

Median-income households in Gallatin County could only afford 39% of the mortgage on a median-priced home in 2024.
Even those in the 75th income percentile are falling short of affording today’s prices.
Rising interest rates — hovering around 6.8% — have pushed monthly payments well out of reach for many buyers.

This affordability squeeze is reshaping the market. Some would-be buyers remain renters longer, while others look to smaller communities outside Gallatin County. Federal programs like LIHTC, Section 8, and HOME provide some support, but the number of households receiving aid is dwarfed by those facing housing cost burdens.

Financing and Market Behavior

The high interest rate environment has shifted financing strategies. In 2024, REALTOR®-assisted transactions showed:

A decline in conventional mortgages, as higher rates discouraged borrowing.
An increase in cash purchases, often from out-of-state buyers or retirees.
Modest increases in the use of VA, FHA, and other alternative financing.

This growing reliance on cash deals highlights a widening gap between well-capitalized buyers and local households trying to break into the market.

Looking Ahead

The Gallatin Valley is moving toward a lower volume, higher cost market. Prices are stabilizing, but at levels well above what most households can afford. Construction is ongoing, but not fast enough to meet demand, and costs remain high.

At the same time, political pressure is mounting. Housing and land use have become major policy issues at the local, state, and federal levels. Decisions made in 2025 could have long-lasting impacts on affordability, zoning, and development across the valley.

What hasn’t changed is demand. People are still drawn here for jobs, lifestyle, and Montana’s unmatched outdoor beauty. The question is whether the valley can adapt its housing supply to keep communities vibrant, diverse, and livable for all.

Final Thoughts

At Ridge Realty, we see both sides of the Gallatin Valley market every day: the opportunity for sellers to capture strong value and the challenge for buyers trying to enter or move up. This report makes clear that knowledge is power — understanding the data helps you make smarter real estate decisions.

Whether you’re buying, selling, investing, or just watching trends, now is the time to plan strategically. Our team is here to help you interpret the numbers and take action with confidence.

✅ Thinking about your next move in Gallatin Valley? Contact Ridge Realty today and let’s talk about how this market affects your goals.

📖 Reference: View the full Gallatin Valley Housing Report here