Flathead County continues to attract more people from out of state than any other Montana county, even as housing affordability in the region has reached crisis levels, according to analysis by the University of Montana’s Bureau of Business and Economic Research.
The county welcomed a net influx of residents in 2025 as Montana overall gained 6,348 new residents—a sharp decline from the pandemic-driven migration surge of 20,263 in 2021. Despite the slowdown, Flathead County remains the state’s top destination for in-migration, though the region faces a widening gap between what people earn and what they must pay for shelter.
Affordability Crisis in Kalispell
Kalispell, the county seat, has the worst housing affordability in Montana when measured against household income. Residents there spend 67 percent of median household income on housing costs, far exceeding both the national affordability threshold of 43 percent and the traditional benchmark of 30 percent that economists generally consider sustainable. The last time American households nationally met that 30 percent threshold was during 2009-2019.
Home prices across Montana have not followed the national trend of correction. While the rest of the country saw a 10 percent decline in home values following sustained mortgage rates between 6 and 7 percent, Montana’s market remained relatively stable. Wage gains in the state have been dramatic, yet they have failed to keep pace with housing cost increases in Flathead County and other Western Montana communities.
Gallatin County, while home to Montana’s most expensive housing market, has not seen the same affordability strain as Kalispell. The higher incomes in Gallatin County—home to Bozeman and Montana State University—have allowed residents to absorb elevated housing costs. However, Gallatin County experienced significant out-migration, losing more than 600 residents to lower-cost counties in 2023, compared to roughly 100 residents Flathead County lost during the same period.
Mixed Job Growth Picture
Flathead County’s job market grew only 1.8 percent from 2024 to 2025, despite statewide job growth of 8.9 percent over the 2019-2025 period. Construction and professional and business services have led job growth sectors, followed by hospitality and healthcare. Manufacturing, natural resources, and mining have shed jobs, and the information sector declined by nearly 8 percent statewide.
Federal workforce reductions have compounded employment challenges. Montana lost 1,643 federal jobs between fiscal years 2024 and 2026, including 600 positions at the U.S. Forest Service and 346 combined positions at the Bureau of Land Management and National Parks Service. The Homeland Security Department added 40 federal jobs. In Flathead County, the federal workforce contracted by 5 percent in 2025, while Yellowstone County experienced the steepest federal workforce reduction at 12.1 percent, followed by Lewis and Clark County at 9.7 percent.
Construction and Data Center Development
The construction industry remains strong in Flathead County, though its growth has not translated into sufficient job creation to offset affordability pressures. Statewide, data center proposals have generated mixed results. A Quantica Infrastructure data center is slated for construction in the Billings area, but proposals in Butte and Bonner have been rejected.
The mismatch between in-migration, flat job growth, and surging housing costs presents a policy challenge for county and state leaders as people continue to move to Flathead County despite the deteriorating affordability picture.
