The median home value across the state rose by two thirds in the last 4 years. Montana Free Press’ Eric Dietrich crunched the numbers and joined MTPR’s Elinor Smith to break them down.
Elinor Smith: Eric, thank you so much for being here today.
Eric Dietrich: Oh, thanks for having me to talk about tax stuff.
Smith: Of course. So big picture, the value of a typical home in Montana is up 66% from four years ago. But what does that mean for Montanans who are paying a monthly mortgage?
Dietrich: So four years ago, before the start of the COVID-19 pandemic, the median home value was $228,000. Now, according to the most current numbers from the Montana Department of Revenue, that's $378,000. So, a huge spike. I did the math as part of my reporting for the story I did – you know, look at a 30 year term, 10% down payment, pretty typical home mortgage. And the monthly housing cost to buy a median home in the state is about $2,200 now versus $900 four years ago. So a two-and-a-half times increase. And that's excluding property taxes and insurance. Which is another few hundred bucks a month for most people.
Smith: So not all counties across the state are built the same. Could you explain which parts of Montana are getting hit the hardest by property value increases?
Dietrich: What we've seen is that housing prices have increased more in western Montana generally than eastern Montana. You know, the rural eastern Montana counties – a lot of them have seen big increases like 20-30% over four years. But the biggest increases have been focused on generally western Montana. Missoula County, for example, the median is up 70% and you go a little bit out outside Missoula to around Phillipsburg, Granite County, and the median value there is up 130% in four years. So more than double.
Smith: Okay. So housing costs are eating up a much larger chunk of Montanan's monthly incomes. How does the average income increase in the state compare to property value increase?
Dietrich: It's really a challenge for people who are aspiring home buyers. Now, say you're a young family, you'd like to be able to buy a house that you can raise a kid in and are looking at how do you get into the market.
It's much harder now than it was even three or four years ago. The per capita income in Montana over the same period is up about 26%. So, a lot of people have seen raises. We also had a lot of inflation in most things, including houses. But 26% higher income versus, you know, two-and-a-half times increase to the monthly housing costs, right? Like, those numbers are not the same.
Smith: Montana's 69th legislative session just wrapped up about a couple months ago. What did lawmakers try to do this last session to address Montanan's trying to buy a home?
Dietrich: This time they passed a pretty big property tax package. And so what they did is they reworked that formula in an effort to to lower the taxable values for most residential properties. There's some complexity in part of the package. Which won't kick in this year, it will kick in next year. It’s a second home tax that actually ramps the taxable values up a bunch on second homes and short term rentals. So if you have multiple properties, keep an eye out for that. But this year, most residential properties should see a decrease that will, in theory, result in lower taxes come November.
Smith: Well, Eric, I know you're working on some coverage in the future about those raising property taxes for second homes. Where can Montanans find more of your work?
Dietrich: I write for Montana Free Press. We're on the line at montanafreepress.org.
Smith: Well, thank you so much Eric. I appreciate it.
Dietrich: Thanks for having me. It's good to chat with you.
