Why Is the Bozeman Housing Market So Expensive?

If you’ve been watching home prices in Bozeman and wondering, “Why haven’t they really come down?” — you’re not alone.

To understand why prices have remained elevated since our meteoric COVID-era rise of nearly 50%, we need to rewind. Not just to 2020 — but even further back.

Bozeman Was Already Outpacing the Nation

Prior to 2020, Bozeman was experiencing annual appreciation rates of up to 8% — significantly higher than many markets across the U.S.

The growing popularity of Montana didn’t happen overnight. Many point to the cultural impact of the film A River Runs Through It, which romanticized the Montana lifestyle and showcased landscapes filmed close to Bozeman. More recently, the hit TV show Yellowstone reignited that fascination, casting Montana as the ultimate wide-open escape.

But media alone doesn’t drive a market.

People want to live here — for the scenery, the lifestyle, the recreation, and the sense of space. Both primary homeowners and second-home buyers have long been drawn to the area. Pair that demand with limited housing inventory, and you have a recipe for above-average appreciation well before COVID entered the picture.

The COVID Surge: A Perfect Storm

Now let’s fast-forward to 2020.

• June 2020: Median single-family home price — $467,000
• December 2020: Up 22%
• End of 2021: Up another 17.4%
• March 2022: Up an additional 10%

From June 2020 to March 2022, Bozeman experienced a 49.4% increase in median home prices.

Unprecedented? Yes.
Illogical? Not at all.

This was simple high school economics: when demand skyrockets and supply stays limited, prices rise. And rise they did.

The Three Major Drivers Behind the Boom

Based on conversations with clients during those two wild years, three primary forces fueled the surge:

1. Remote Work Changed Everything

People who had long vacationed in Bozeman suddenly had the freedom to live here full-time. When companies announced permanent remote work policies, many buyers thought:

“Why not live where we love to vacation?”

2. Lifestyle & Freedom

Montana was widely perceived as having fewer COVID restrictions than many other states. That drew both primary residents and a significant wave of cash-heavy second-home buyers.

In fact, The Washington Post ran an article in 2020 titled “The Montana Gold Rush,” highlighting the intensity of our real estate market.

3. Historically Low Interest Rates

Interest rates dropped dramatically. Data shows that for every 0.5% decrease in mortgage rates, roughly 2.75 million households can enter the housing market.

Lower rates meant higher purchasing power — and demand surged almost overnight.

What It Actually Looked Like on the Ground

From an agent’s perspective, it was intense.

Imagine this scenario:

• A couple sells their home for $467,000 pre-COVID.

A similar home lists at $467,000 a few months later.

• It receives 5 offers.
• Buyers, exhausted from losing out on multiple properties, start bidding aggressively.
• The home sells for $500,000.

A nearby homeowner sees that sale and lists their property.

• That home receives 9 offers.
• It closes at $550,000.

In just a matter of months, we leapfrogged from $467,000 to $550,000.

Some properties received 20+ offers. I personally had listings where spreadsheets became necessary just to keep offers organized. It was fast, emotional, competitive — and entirely driven by supply and demand.

So Where Are We Now in 2026?

The frenzy has cooled — but the foundation remains.

Here’s what has shifted:

• Some remote workers have been called back to the office.
• Some second-home owners from warmer climates like Florida and Arizona realized Montana winters aren’t for everyone.
• Interest rates have risen significantly, limiting affordability — especially at higher price points.

And yet…

Homes are still selling.
Inventory remains limited.
Multiple-offer situations still happen.

Most importantly, the core reasons people wanted to live here before COVID haven’t changed.

Bozeman is still beautiful.
The lifestyle is still desirable.
Demand still exceeds supply.

What’s Next?

Interest rates will continue to influence affordability and short-term price movement. But unless we see a dramatic oversupply of housing — which currently isn’t the case — it’s difficult to argue that prices will retreat to pre-2020 levels.

The so-called “Montana Gold Rush” may not be as frenzied as it was in 2021, but it doesn’t appear to be over.

Bozeman’s appeal wasn’t created by COVID.
COVID simply accelerated what was already happening.

And that’s why the Bozeman housing market remains expensive.