Flathead County Sees Highest In-migration Rates as Housing Prices Continue to Outpace Wage Gains

In Flathead County where the construction industry remains strong, job gains are flat and in-migration is the highest statewide, Kalispell homeowners are spending significantly more of their income on housing than the statewide median, according to the latest affordability metrics compiled by economists.

University of Montana’s Bureau of Business and Economic Research (BBER) Director Jeff Michael last week told a Kalispell Hilton Garden Inn and Suites audience at the mid-year economic update that Kalispell’s median household income to housing affordability ratio places the threshold at 67%. By comparison, the nationwide threshold is 43%.

“[We’re] looking at income related to what it takes to buy the median price home for the median household with a 10% down payment,” Michael said. “Thirty percent of your income is generally considered a threshold for a definition of affordability, and from 2009 till 2019 … median households all across the country nationally met this affordability threshold of 30%.”

But as a shortage of housing inventory combined with steady in-migration and the Flathead Valley’s high demand for real estate, that affordability threshold has since shot up dramatically as home prices outpace wage gains.

Compared to Flathead County, Gallatin County’s housing market remains the most expensive statewide, but Michael said the population’s income levels are able to meet those high prices.

“So they actually perform a little bit better than you see here in Kalispell,” Michael said, referring to Gallatin County. “We’ve had the most acute affordability problems out here in the western part of Montana where we’ve seen the biggest increase in costs relative to local income.”

Despite the slowdown in Montana’s population growth following the pandemic-era boom, Flathead County continues to show the highest volume of in-migration with Gallatin County trailing close behind, according to IRS tax filing data compiled by BBER economists.

In 2025, Montana gained roughly 6,348 new residents compared to 20,263 people in 2021 as population numbers stabilized in the post-pandemic market.

“As long as it’s moderate at this level, I believe we can keep up with housing production,” Michael said.

But as Montana gains new residents, it’s also losing residents in the state’s most expensive markets.

Gallatin County, for example, consistently loses the most residents statewide while Flathead County attracts the highest volume of out-of-staters.

In 2023, Gallatin County lost more than 600 residents who moved to a lower-cost county while Flathead County lost roughly 100 people to other counties, according to IRS data.

“Now we see housing costs driving more of this local migration,” Michael said. “Somebody may be leaving Flathead or leaving Gallatin into another area of Montana where they find some better affordability conditions.”

While high mortgage rates have held steady between 6% and 7% in recent years, causing a 10% home price correction across the country, Michael said Montana has not followed nationwide trends.

“We saw it level off, but we didn’t see that correction,” Michael said. “It started to increase a little bit shortly thereafter and it’s been pretty quiet for the past year or two. Prices appear to be staying relatively steady and that’s some good news on affordability as incomes are catching up with that. We’re making incremental progress on affordability.”

But even as Montana experiences some of the most dramatic wage gains nationwide while Flathead County’s job market leads the state with a 1.8% growth from 2024 to 2025, Michael said the job growth has flattened.

From 2019 to 2025, there’s been an 8.9% job growth statewide with professional and business services and construction leading the pack, followed by hospitality and healthcare. Manufacturing, natural resources and mining showed negative job growth while the information sector, which includes traditional forms of media, has declined by nearly 8%.

Federal jobs have declined by 1,643 employees between fiscal year 2024 and 2026 statewide, with the highest volume of job cuts coming from the U.S. Forest Service, which saw 600 losses. The Bureau of Land Management and the National Parks Service followed with 346 losses while the Homeland Security Department added 40 jobs.

Flathead County’s federal workforce reduced by 5% in 2025 while Yellowstone County saw the greatest reduction of 12.1%. Lewis and Clark County, an area that covers the state capital, saw a reduction of 9.7%.

“The smallest loss has been here in Flathead and Gallatin counties, both in numbers and percentage,” Michael said. “These are also areas that are relatively low in federal jobs, despite the Park Service, and overall, there’s relatively low federal government employment … there are losses across the board with one exception being the Department of Homeland Security.”

Compared to the nationwide economy, Michael said Montana is vulnerable to the current macroeconomic environment as data centers account for significant growth while fuel prices disproportionately affect residents.

“Data centers [are the biggest] drivers of U.S. economic growth right now,” Michael said.

While a data center called Quantica Infrastructure is on tap for construction in the Billings area, proposals in Butte and Bonner were rejected. Without data center production, the state has fallen behind the national economy while Montanans remain sensitive to fuel prices as the war with Iran and the Strait of Hormuz closure continue to cause oil disruptions.

“It’s one of these thigs that just pinches Montana households a little bit more … because we use 27% more gas per person than the average American,” Michael said.

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