A University of Montana economist says housing costs are likely to keep rising until more homes are built. Lawmakers heard that testimony Monday as they study Montana’s housing issues ahead of the next legislative session.
UM economist Patrick Barkey told the committee of lawmakers studying the state’s economic future that no one expected the housing market to boom following the COVID-19 pandemic and temporarily sky-high unemployment rates.
Barkey says the surge in demand has exposed a chronic underbuilding of homes over the past 20 years in the state’s fastest-growing communities. That, paired with stagnant growth in income, is making it much harder to buy houses than it used to be.
“We saw at one point, price growth over 25%,” Barkey says.
Using data from KPMG Economics, Barkey also noted that Montana, like other states in the Mountain West, is seeing higher rates of inward migration than the rest of the country, adding to demand.
Until Montana’s housing supply issue is resolved, Barkey says prices, availability and rent will remain stressed regardless of demand over the next decade.
The legislative committee plans to use the data to inform policy-making during the next legislative session in 2023.