Loading Content...
Rising Home Values and Ownership Fluctuations in Polson, Montana: A Decade of Lakeside Housing Trends
CATEGORY
Property Value
DATA
Percent Owner Occupied
Housing Prices
Median Rent
Population
Loading Content...
Property Value
Percent Owner Occupied
Housing Prices
Median Rent
Population
Polson, Montana, nestled along the southern shore of Flathead Lake, is a charming city known for its natural beauty and outdoor recreational opportunities. Over the past decade, this city of approximately 6,800 residents has experienced notable shifts in homeownership rates and housing costs. The overall trend shows a slight decrease in homeownership, accompanied by significant increases in both average home prices and average rent prices.
The homeownership rate in Polson has fluctuated over the years, with a general downward trend. In 2013, 59% of housing units were owner-occupied. This percentage increased to a peak of 67% in 2017 before declining to 57% by 2022. Concurrently, average home prices have shown a consistent upward trajectory. In 2013, the average home price was $233,185, which steadily increased to $544,082 by 2022, representing a substantial 133% increase over this period. This inverse relationship suggests that rising home prices may have contributed to the declining homeownership rate, as purchasing a home became less affordable for many residents.
Federal interest rates have played a significant role in shaping homeownership trends in Polson. From 2013 to 2016, interest rates remained extremely low, hovering around 0.1% to 0.4%. During this period, homeownership rates in Polson were relatively stable, ranging from 59% to 61%. As interest rates began to rise from 2017 onwards, reaching 1.68% in 2022, we observed more volatility in homeownership rates. The peak homeownership rate of 67% in 2017 coincided with the start of interest rate increases, possibly reflecting a rush to purchase homes before rates climbed further. However, as rates continued to rise, homeownership declined to 57% by 2022, suggesting that higher borrowing costs may have deterred potential buyers.
Renter-occupied housing units in Polson have shown an overall increasing trend, from 41% in 2013 to 43% in 2022. This rise in renter-occupancy has been accompanied by fluctuations in average rent prices. In 2013, the average rent was $814 per month. It decreased to $680 in 2017 before rising again to $767 in 2022. The population growth from 6,217 in 2013 to 6,789 in 2022 likely contributed to the increased demand for rental properties, supporting the upward trend in both renter-occupancy and rent prices.
In 2023, the average home price in Polson slightly decreased to $540,434, marking a small dip from the previous year. However, by 2024, prices rebounded to $560,301, indicating continued appreciation in the housing market. Notably, federal interest rates reached 5.02% in 2023 and further increased to 5.33% in 2024, representing the highest rates in over a decade. These elevated interest rates may pose challenges for potential homebuyers, potentially affecting future homeownership rates in Polson.
Looking ahead, predictive models suggest that average home prices in Polson are likely to continue their upward trajectory over the next five years, albeit at a potentially slower rate due to the current high interest rate environment. Average rent prices are also expected to increase, driven by population growth and the shift towards renting. However, the rate of increase may moderate as the market adjusts to economic conditions and housing supply changes.
In summary, Polson has experienced a gradual shift towards renting, with homeownership rates declining despite population growth. This trend has been accompanied by substantial increases in average home prices and more modest growth in average rent prices. The interplay between federal interest rates, housing affordability, and population dynamics will likely continue to shape Polson's housing market in the coming years.
