2024 Housing Market Recap & 2025 Predictions
It's been a while since I’ve paused to reflect on the year, and I wanted to take a moment to look back on 2024 and share what’s ahead in 2025.
2024 was an interesting year for housing here, with a stable market and continued housing development despite buyer hesitation. Our local market continues to outpace national trendlines in terms of sale activity and appreciation.
On a personal note, I married my best friend and had the best year of my real estate career yet. Our wedding day was a perfect reminder of how important the people we surround ourselves are. I’m incredibly grateful for the support of amazing clients, friends, and partners along the way, and my goal remains to keep my network informed and connected every step of the way.
Who Is Moving to Southwest Montana?
Over the past three years, the top states from which people are moving to Montana include California, Colorado, Texas, and Washington. In fact, last year, out-of-state buyers accounted for 24.68% of the 3,019 residential sales, with the remaining sales representing Montana residents relocating within the state.
The graphic below highlights the breakdown of sales on our MLS, represented by buyer state. Notably, 74% of property sales are residential homes, which is the focus of this data. The Big Sky Country MLS tracks property sales across the following counties: Beaverhead, Broadwater, Deer Lodge, Gallatin, Granite, Jefferson, Madison, Meagher, Park, Silver Bow, and Sweet Grass.
Our Market
The national market stalled with 4.06 million sales, a 0.7% decline from the year before. However, the median national home price for all of last year rose 4.7% to an all-time high of $407,500, according to the National Association of Realtors.
Some of these national trends are felt here, as housing has become less affordable due to the pandemic surge in demand and limited buyer power. However, we are fortunate to have a steadily growing economy with strong job creation and continued desirability. Our region experienced a 0.86% increase in sales, a median sales price increase of 4.4%, bringing us to $585,000, and a sales volume increase of 14%, indicating increased demand and a continued rise in more expensive homes. New listings, days on market, and months of inventory increased, which parallels the sentiment that the market has slowed down from its peak pandemic buyer frenzy. This brings us into a healthier market with more balance for both buyers and sellers, with differences depending on location and price range.
Each city and town has its own nuances. For example, Belgrade had a healthy increase in sales price, number of sales, and sales volume, while Bozeman city limits were more static in comparison.
Reach out to me anytime for more market data or specifics. I'm here to provide real estate insight and guidance.
National Buyer and Seller Profiles
As the economy and housing market continue to evolve, so too do the characteristics of buyers and sellers. What remains constant, however, is the desire among buyers to own a home and make a sound financial investment, while sellers are often seeking to upsize, downsize, or be closer to family and friends.
3 Key Highlights:
The median first-time buyer age increased to 38 years old this year, up from 35 last year, while the typical repeat buyer age also increased to 61 years from 58 last year.
Detached single-family homes continued to be the most common home type for recent buyers at 75%, followed by townhouses or row houses at 7%.
The typical age of a home seller was 63 this year, the highest ever recorded.
Read the National Association of Realtors Report
National vs Montana Appreciation
In 2024, housing prices saw moderate appreciation across the United States.Housing appreciation refers to the increase in your home’s value over time. According to the Federal Housing Finance Agency (FHFA) House Price Index (FHFA HPI®), U.S. house prices rose by 4.5% between Q4 2023 and Q4 2024. This marks consistent positive annual appreciation every quarter since 2012. However, Mississippi was the only state that saw slight declines in home prices.
Montana's Strong Market Performance
Montana stood out with a 6.78% appreciation rate, ranking 11th in the nation. Over the past three decades, the state has experienced an astounding 636.69% increase in home values since 1991—leading the charge just ahead of Utah. Montana's impressive appreciation rate means homeowners in the state have seen a significant return on their investment, and Montana continues to outperform many other states in terms of long-term growth.
Interest Rates
The current 30-year fixed mortgage rate stands at 6.7%, marking a two-month low. This continues the downward trend from the peak of approximately 8% in October 2023. In 2024, rates briefly dipped below 6%, spurring a spike in refinancing. Looking ahead, economists predict that interest rates in 2025 will likely hover around the mid-6% range, which is higher than last year's forecasts of rates potentially falling to 5.5% this year.
What Are Buyers Doing?
To navigate these rates, more buyers are exploring options like co-ownership, buying down points, increasing their down payments, and seeking gifts or loans from family and friends. Additionally, 2024 saw a record number of cash buyers entering the market.
My Business Updates + 2025 Outlook
I’m excited to share some updates with you! Berkshire has moved into a brand-new office at 15 Stafford Avenue. It's been a fun and energizing experience as our agents set up their new spaces. On a proud note, Berkshire Montana remains the highest-performing brokerage in the state.
Predictions for 2025
Despite national events, Montana's continued economic growth, popularity, and the desire for a better life in open spaces with more freedom should keep our market steady. I predict another stable year for our area, with little to small increases in the number of sales or median prices. The luxury market will likely continue driving volume up. We’re also expecting rental vacancy rates to rise above the 10% mark for the first time in years, thanks to current construction.
It’ll be interesting to see where we end up by the end of 2025!
