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Report: Montana sees high population growth rate; western part of state bears brunt [1]
['David Erickson', 'Montana Dept. Of Labor']
Date: 2024-10
Montana ranks fourth in the nation for the highest rate of people moving here since the pandemic (the net in-migration rate), with many of them young and working.
And western Montana is where most people are moving and also where housing affordability is most acute, according to the state's annual Labor Day Report.
“The state’s population grew by 4.7% from 2020 to 2023 due to in-migration, translating to an additional 51,000 people,” wrote state economist Amy Watson in the report. “Most of the in-migration has occurred in the western portion of the state since the pandemic.”
About 73% of people who recently moved to the state are either employed or actively seeking work, which is higher than the labor force participation rate of existing residents, she added.
The newcomers to Montana are younger than the statewide average, which the state’s economists say is helping to slow down the aging of Montana’s population.
“Only 8.6% of in-movers are over the age of 65, compared to 20% of the overall population,” the report found. “Approximately 42.7% of newcomers are prime working age, compared to 37% of existing residents."
The number of people moving here has declined since a peak in 2021, but remains higher than it was before COVID.
“In 2023, over 10,000 more people moved to Montana than left the state,” the report states. “In the decade prior to the pandemic, Montana averaged about 6,300 net in-migrants per year. Net in-migration is projected to continue due to factors such as Montana’s business-friendly environment, quality of life, an emerging professional services industry and opportunities for remote work. Most people moving to Montana participate in the state’s labor force, thus increasing labor supply.”
Significant population growth in the state’s largest cities has spilled over into the neighboring counties.
“Among smaller counties with less than 30,000 people, those bordering larger urban areas had the fastest population growth over the last three years,” Watson explained. “Newcomers provide an important source of labor supply to help address the state’s long-standing workforce shortage in all areas of the state.”
The annual report is put out by the Montana Department of Labor and Industry, and was written by a team of economists, but the primary author was Watson.
Escalating housing prices continue to vex Montanans who don't own their home, according to the numbers.
"The typical home value in Montana reached $470,000 in the first half of 2024, representing a 70% rise in home values over the last five years," Watson explained in the report. "The rapid pace of home price growth has raised concerns about affordability. Rising home values and increases in the cost of borrowing have reduced the affordability of new mortgages and rent."
In 2022, an average Montana renter spent nearly 28% of their household income on rent, according to U.S. Census Data. About 45% of renters in the state are cost-burdened, meaning they spend more than 30% of their household income on rent alone. And Montana is in the group of 29 states where a person earning the median income is unable to afford a median-priced home.
And again, western Montana is where the numbers show the issue is most critical.
"Affordability concerns are most acute in the western portion of the state where house price growth significantly outpaced wage growth," the report said. "Mortgage rates are expected to decrease in late 2024 and into 2025, which will improve affordability over the coming year. Nevertheless, the trend of low affordability is not expected to significantly reverse in the near term, as persistent low inventory and price increases in many areas will likely mitigate any affordability benefits that come from a reduction in mortgage rates."
About a third of the state’s population, 333,000 people, are not employed or not actively seeking work. About 61% of those individuals are retired, Watson continued.
“While the state continues to face a workforce shortage, with two job openings for every one unemployed person, there are signs that the labor market is beginning to ease,” she said. “Over 10,000 more Montanans entered the labor market in 2023, a welcome sign for many businesses who have been struggling to find workers.”
The per-capita income rose to $63,918 in 2023, which ranks 28th among states.
The report notes that the lack of affordable child care options is limiting workforce engagement in Montana, which stifles the economy.
“Child care provides critical support to the Montana economy, allowing parents of young children to participate in the labor force and preparing the future generation of workers through high-quality early childhood education,” Watson explained. “Licensed child care capacity has been consistently undersupplied despite its essential role in supporting the statewide workforce.”
In 2023, licensed child care capacity met only 44% of estimated demand.
“Child care shortages exist in every county, with nearly 60% of counties identified as child care deserts, meaning supply meets less than a third of estimated demand,” the report states. “The most significant unmet demand occurs in the more rural areas of the state. There are four counties (all east of the divide) without a single licensed child care provider.”
The net in-migration rate is the difference between the number of people moving here and the number of people leaving Montana divided by the state's population.
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[1] Url:
https://missoulian.com/news/local/business/montana-economy/article_a1e6c3f4-7c2e-11ef-b45c-dfb808a9b473.html
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