Housing affordability remains a top economic concern for Flathead Valley

While Montana ranks high for new jobs, most of the salaries associated with available positions are not conducive to living in gateway communities like the Flathead Valley.

Montana has become a top five state in job creation over the past year yet is ranked low when it comes to wage growth, according to Jeff Michael, director of the University of Montana’s Bureau of Business and Economic Research.

While population growth has decreased in Montana, according to the annual 2025 Economic Outlook presented on Tuesday in Kalispell by the University of Montana, it is still difficult to afford housing.

“It's good news, bad news,” Michael said. “It's easy to find a job in Montana where you’re adding jobs, but the sectors that are adding the most jobs have below average pay.”

In addition to discussing housing, the outlook focused on Montana’s artificial intelligence future, population and recreation growth since the Covid-19 pandemic.

The National Association of Realtors ranked Montana as the least affordable state in 2024, based on current home listings compared to local incomes. Job growth in 2024 was skewed toward lower-paying service sectors.

“There’s no doubt that Montana has a housing cost challenge,” Michael said.

Home prices, compared to the median household income, are particularly high, Michael said while noting that mortgage rates also impact affordability. Mortgage rates saw fluctuations in 2024, but the average 30-year fixed mortgage was 6.85% at the end of December, according to the government-sponsored home lender Freddie Mac.

Michael predicts rates will stay elevated in 2025.

“The National Park counties are the ones that have seen the highest increases in home prices, especially here in the Flathead,” he said.

Population growth has continued to slow in the state. The U.S. Census Bureau in July 2024 put Montana’s population at 1,137,223, an increase of 5,931 from the same month the year prior.

Migration to the state has fallen 75% since it peaked during the pandemic. In 2021, the state population was 1,106,366 and sat at 1,122,878 in 2022, according to the Montana Department of Commerce.

Looking ahead, 2025 will continue to see a slowed growth trend, according to presenters. Population growth will slow further, interest rate sensitive sectors will get little relief, and the economy will feel the effects of mining and wood mill closures.

Further down the road, Michael suggests that growth may pick back up with moderate population growth, technology sector growth statewide and investing more in mining, energy and tourism.

Parts of Tuesday’s conversation looked at policy changes that the second Trump administration has implemented or suggested. Montana is among the lowest states for export dependence, meaning that the enforcement of tariffs won’t hit the state as hard as other manufacturing focused states.

Montana should also be relatively unimpacted by immigration changes, Micheal said. This year, a key issue will be federal spending and where federal money is allocated. From Medicaid to military jobs to federal agencies, Montanans rely on federal funds.

Integrating artificial intelligence, or AI, into the workforce has the potential to add more productivity as well, according to Paul Gladen, the associate vice president for research and economic development at the university.

Flathead County ranks well in terms of health care, according to Patrick Barkey, the director of research for the bureau, among other counties with hospital systems. It is one of 20 counties to receive a top health care employment rate ranking statewide.

However, it is estimated that over half the hospitals in rural America are losing money. Putting an end to the state’s Medicaid program, Barkey said, would result in less compensated care, further adding to that strain and leaving thousands of Montanans without health care.

In Flathead County, health care falls behind construction, accommodation and food, professional and technological services and wholesale trade as more prominent industries. Although, Barkey said, the county has had a “nice bounce back” in health care after some turbulent years.

The pandemic was hugely disruptive to most health care providers, with labor costs spiking and inflation bringing costs up. Pre-pandemic trends in job growth, wage levels and medical inflation have since resumed, helping with the “bounce back.”

Montana’s outdoor recreation industry grew by just over 7% in 2023, according to Melissa Weddell, the director of the university’s Institute for Tourism and Recreation Research, with nearly 3 million visitors to Glacier National Park in 2023 alone.

“Something that is going to be unique in this region is seasonal workers,” Weddell said, referring to the Flathead. “Many have had contracts retracted. Our national parks and our public lands really use thousands of seasonal workers... that’ll have interesting pressures on the surrounding gateway communities.”

Especially with the high cost of living in areas like the Flathead Valley and the greater Yellowstone area. Officials expect a strong and steady visitation record for 2025 as well with room to expand recreation opportunities during the shoulder season.

Meanwhile, infrastructure in the valley continues to expand.

“Steady as she grows,” Lorraine Clarno, president of the Kalispell Chamber of Commerce, said.

Glacier Park International Airport saw the highest amount of traffic last year with more than 1 million passengers, according to the chamber. That is an increase of 12.6% from the year prior and a 21% increase from 2022. Clarno said she doesn’t expect visitation numbers to overwhelm infrastructure moving forward.

Despite growth and changes in technology, the cost of living in Northwest Montana seems to be staying stagnant at a high level. While Kalispell has seen a decrease in residential and multi-family building permit requests, Clarno said that a lot of units are slated to be constructed this year.

“We still have a huge affordability issue in our community, there’s no ifs ands or buts,” she said.

Housing affordability remains a top economic concern for Flathead Valley

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