It feels like a distant era now, but it wasn’t that long ago that signs of Bozeman’s crushing housing crisis were unavoidable.  As rents and housing prices skyrocketed during the pandemic, businesses struggled with staffing, the number of people living on city streets grew and homes put on the market were sometimes gone in hours, often bought sight unseen by out-of-staters looking to fulfill their western COVID-escapism dreams. More than half a decade removed from the pandemic’s start, Bozeman’s housing market has cooled significantly.  For-sale signs are staying on Bozeman lawns for weeks or months as the average time for-sale properties spend on the market lengthens.  The median single-family home sale price in Bozeman in February was $715,000, down from a high of $898,000 in May 2023. The median sale price for condos was $480,000. Compared to last February, the median single-family home price was just 0.4% higher, and the condo median sale dropped by 4.9%.  Rents have also moderated as thousands of new apartments pushed the area’s vacancy rates into the double digits, an unheard-of scenario just a few years ago. That prices are now holding steady, or even dropping, year over year, is a big shift. “The market seems to be correcting a little bit, and I think there’s a little bit more hope on the horizon,” Mark Egge, a local housing advocate and member of the city’s Community Development Board, told Montana Free Press. “I don’t have any friends who have moved out of town in the last year because their landlord increased their rent by $200,” he added. But a more stable market doesn’t necessarily mean an affordable one.  “Now (we’re) in this spot where there’s quote-unquote stability, but it’s not a good stability,” Bozeman Mayor Joey Morrison said. “It’s a stability that’s still extremely expensive.”   The average rent across all unit housing types for the last quarter of 2025 was just north of $2,000, according to SterlingCRE Advisors, which tracks market trends in Bozeman. Nearly 40% of all sales for single-family homes in the last six months in the greater Bozeman area (excluding Belgrade) were more than $1 million, the company reported. In that same geographic area over the last half year, just 8% of sales came in between $450,000 and $600,000, according to data pulled from the Big Sky Country Multiple Listing Service.  Housing advocates and policy makers agree that one of the most pressing gaps in Bozeman’s housing market is enough supply for entry-level home ownership.  The city and developers have taken advantage of federal dollars to subsidize below-market-rate rental projects, resulting in hundreds of new units already online and 1,400 more in the development pipeline. Most new rental developments in Bozeman have at least some vacancies, and many are offering incentives to entice would-be tenants. But no similar program exists for new for-sale units, and the cost of building in Bozeman, spurred by high land, labor and material costs, means building new units without significant subsidies is an uphill battle.  Morrison said the city is considering whether to ask taxpayers on this year’s ballot to support housing efforts. It would be the city’s second attempt at a housing levy in recent memory — a similar ask failed in 2021 by a margin of 277 votes.  “I think it’s hard to really imagine how we get our arms around this without new revenue,” Morrison said.  WHO RENTS, WHO BUYS Though the moderation in home prices has some in Bozeman encouraged that prices could fall significantly, housing professionals say not to hold your breath. Matt Ryan, a Realtor with Bozeman Real Estate, said that, though there are concerns about inflation, the market is fairly active in early 2026. He has twice as many listings this year as he did a year ago, and most of his fellow agents at his firm have upcoming listings, which is more active than in previous years. Ryan and Mark Corner, the Southwest Montana Realtors president, both said they don’t predict any upcoming crash. Bozeman will continue to be a desirable place to live.  “We’ve entered the phase where Bozeman is beachfront property, you know, and it’s desirable, and people want it,” Ryan said.  Data from the Southwest Montana Realtors shows that, at least for single-family homes, the market still favors the seller. The month’s supply of inventory metric measures the market balance of inventory versus sales. Longer than six months is generally considered a buyer’s market. Below six months, and sellers hold more cards.   In February, there was a 3.7-month supply of single-family home inventory, though the data showed a 6.2-month supply for condos in Bozeman.  Prices remain high, though. An economic report commissioned by the city in 2025 found that homeowners need to make 182% of the area median income — or about $220,000 a year — to afford the median home in Bozeman.  Those stubbornly high housing prices are keeping some wanna-be-first-time-homebuyers in the rental market longer, said Lila Fleishman, the community development director with Bozeman’s Human Resources Development Council. “We’re seeing some of that pressure of people that would prefer to be homeowners, that are just renting for longer,” Fleishman said.  That pressure, said David Fine, with the city’s economic development department, is part of the reason why he doesn’t foresee rents in Bozeman dropping significantly in the future.  “There’s a huge hole in the market between what’s affordable in terms of market-rate rent and what’s an affordable payment in terms of affordable homeownership,” Fine told MTFP. “That gap between, you know, $2,500 a month for a two-bedroom, right, and that affordable home payment is pretty big for a lot of people.” For now, there are plenty of market-rate apartments for renters to choose from in Bozeman.  In Bozeman, about 1,900 multifamily units were built between 2024 and mid-2025, lifting the vacancy rate in that market to 18% at one point last year. The vacancy rate has dropped by a percentage point per quarter since the third quarter of 2025 and is now about 12%, said Kara Hogan, with real estate firm Sterling CRE. The relatively high vacancy rate and resulting moderation to market rents have pushed some developers to slow down on projects, Hogan said, and if the continued demand for units holds, Sterling predicts the vacancy rate could drop to 6% by the end of 2026.  “It’s definitely going to come down to the degree of what it will come down to; time will tell,” Hogan said.  WHAT’S NEXT Supporting more income-restricted units was the “relatively low-hanging fruit” of addressing the housing crisis, Fine said.  Now, the city is eyeing a patch of land it owns in west Bozeman to build below-market, for-sale homes off the Fowler Avenue corridor. After the city presented concept plans, neighbor pushback prompted the city to pursue a consensus-building process, which Fine said is taking place this year.  Demand for below-market homes remains high. Nathan Stein is the executive director of the Headwaters Community Housing Trust, which has built 62 homes in the Bridger View neighborhood of Bozeman and has sold half at below-market prices.  They received hundreds of applications from potential buyers for the first round of homes in the development, and still receive between 20 and 50 for every home that becomes available, with some repeat applicants. Home ownership is seen as a crucial step in American life, Stein pointed out.   “If middle-income households in Bozeman don’t see that in their future, they’re going to go somewhere else where they do,” Stein said. “I think everyone in Bozeman can relate to that because they know someone, a friend or a family member or colleague who left Bozeman, and it’s because they didn’t think they were going to be able to own a home.”  “If we don’t address that, then we’re going to end up as a hollowed out community with a stressed and small and transient middle class.” The post Bozeman housing market cools, but a stable market hasn’t meant an affordable one  appeared first on Montana Free Press. ...read more read less