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Billings, Montana: Rising Home Values and Ownership Rates in the Rimrock City
CATEGORY
Property Value
DATA
Percent Owner Occupied
Housing Prices
Median Rent
Population
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Property Value
Percent Owner Occupied
Housing Prices
Median Rent
Population
Billings, the largest city in Montana, is known for its stunning rimrocks and diverse outdoor recreational opportunities. This vibrant city has experienced notable shifts in homeownership rates and housing prices over the past decade. From 2013 to 2022, Billings saw a gradual increase in homeownership, accompanied by significant growth in average home prices and average rent costs.
The homeownership rate in Billings has shown a general upward trend, rising from 61% in 2013 to 65% in 2022. This increase coincided with a substantial rise in average home prices. In 2013, the average home price in Billings was $207,018. By 2022, this figure had climbed to $357,136, representing a 72.5% increase over nine years. The peak homeownership rate was observed in 2021 at 67%, corresponding with an average home price of $306,288. This trend suggests a strong correlation between rising home values and increased homeownership, possibly indicating growing confidence in the real estate market and improved economic conditions in Billings.
Federal interest rates have played a significant role in shaping homeownership trends in Billings. The period from 2013 to 2020 saw historically low interest rates, ranging from 0.09% to 0.38%. This low-interest environment likely contributed to the steady increase in homeownership rates during this time, as it made mortgage financing more accessible and affordable for many residents. The slight dip in homeownership from 67% in 2021 to 65% in 2022 coincided with a rise in interest rates to 1.68% in 2022, potentially making home purchases less affordable for some buyers.
Renter percentages in Billings have generally decreased as homeownership rates increased. The renter-occupied rate fell from 39% in 2013 to 35% in 2022. Despite this decrease, average rent prices have shown a consistent upward trend. In 2013, the average rent was $759 per month. By 2022, it had risen to $1,085, marking a 43% increase. This rise in rent prices, coupled with the city's population growth from 109,062 in 2013 to 119,969 in 2022, suggests a competitive rental market with increasing demand for rental properties.
In 2023, the average home price in Billings reached $375,006, with federal interest rates at 5.02%. Moving into 2024, the average home price further increased to $382,688, while interest rates climbed to 5.33%. These figures indicate a continued upward trajectory in both home prices and interest rates, potentially impacting affordability and homeownership rates in the near future.
Looking ahead, predictive models suggest that average home prices in Billings may continue to rise over the next five years, potentially reaching around $425,000 by 2029. Average rent prices are also expected to increase, possibly surpassing $1,300 per month within the same timeframe. These projections are based on historical trends and current market conditions.
In summary, Billings has experienced a notable increase in homeownership rates from 2013 to 2022, coupled with significant growth in both average home prices and average rent costs. The low-interest-rate environment up to 2021 likely contributed to increased homeownership, while recent interest rate hikes may present new challenges for potential buyers. The rental market has seen steady price increases despite a decreasing percentage of renters, indicating a competitive and potentially constrained rental supply. As Billings continues to grow, these housing market dynamics will play a crucial role in shaping the city's residential landscape.
