The Montana real estate market was far from immune to the impact of COVID-19. Not unlike everywhere else, real estate in Montana experienced a bottleneck once "shelter-in-place" orders were issued in the first quarter of 2020. Seemingly overnight, activity dried up and threatened to put an end to nearly a decade's worth of positive growth. Uncertainty forced many listings to be withdrawn from the market and prospective buyers were inclined to hold on to their cash reserves.
Looking back, however, the regression was only temporary and may have actually created a catalyst for one of the fastest moving markets in history. Over the course of the pandemic, real estate prices in Montana have continued to test new highs almost every month. Home prices are now prohibitively expensive across the entire state and pricing many people out of the market. Still, demand remains pent up and buyers are still on the market.
For better or for worse, the hot housing market has become the Federal Reserve's main priority. With inflation on the rise, a looming recession, and housing prices as high as they are, markets across the country are in the Fed's crosshairs. In the Montana real estate market, and everywhere else, interest rates will rise at least a few more times. Mortgage applications have already fallen in response to interest rates in excess of five percent. As demand falls, prices may soon follow, which begs the questions: Is now a good time to invest in the Montana real estate market? Let's take a look at what the latest moves by the Fed means for residents and investors alike.