If anyone thinks all the conversation about building affordable housing in Montana is simply election-year rhetoric, new info from the National Association of REALTORS® should convince you otherwise.

The association’s latest report on the “Affordability Distribution Score” shows Montana, and Idaho are now the “least affordable” for local homeownership, even surpassing California. Montana’s score is just 0.38. A “zero” on the index is when no one can afford a home in a given market. 

The REALTORS® report shows a marked trend over the past couple of years, especially since the pandemic, not only driven by higher home prices but also the corresponding climb in interest rates. That’s put homeownership out of the reach of many families and individuals.

An analysis of more than median Montana home prices

The REALTORS® Affordability Distribution Score considers far more than median home prices. As opposed to the Housing Affordability Index, or HAI, which the government commonly uses, the Distribution Score looks at affordability for “all income percentiles”. It also analyzes how affordable the active inventory of homes currently on the market, instead of just the ones recently sold.

That trend has been mirrored here in Montana. Recent reports from the Missoula Association of REALTORS® have illustrated not only the short supply of homes but also how homes above $750,000 have stayed the market longer over the past couple of years.

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Comparing scores

Montana’s score of 0.38 is slightly higher than Idaho’s, which is #2 on the list at 0.40. California, which has largely driven home prices across the West over the past 30 years, is at 0.42.

At the start of the pandemic in 2020, Montana’s affordability index was 0.70, just below the national index of 8.6. In 2017, when the state’s housing market was heating up, the index was 0.63. Idaho was 0.74.

Among the least affordable states, California was $3, followed by Hawaii and Oregon. Iowa, West Virginia, Ohio, Indiana, and Michigan were the five most affordable states in the report.