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Reality of Purchasing: First-Time Buyers in Bozeman

As of March 2025, the median price for single-family homes in Bozeman, MT is $783,500. To purchase a single-family home in our City Limits, assuming you opt for a conventional mortgage with a 20% down payment, you'll need to pay $156,000 upfront and other purchasing expenses. With this down payment, and assuming an interest rate of 6.846% and a 1% property tax, your monthly payment- covering principal, interest, taxes, and insurance (PITI)- would be shy of $5,000. For perspective, my first home was a condo in Bozeman with a monthly payment of nearly $800. A $5,000 monthly payment would have been completely unattainable at that time. 

While these numbers are big, there is no need to feel intimidated! There are plenty of options beyond a single-family home in Bozeman and the surrounding area to help you find your perfect, accessible home.

Start by identifying your needs:

The City of Bozeman prioritizes single-family housing as starter housing in its affordable housing plan, to the detriment of our community regarding buyer expectations regarding purchase type and cost of ownership. 

Single-family homes are more expensive to procure and require greater maintenance than other housing types. They carry the cost of all maintenance, interior, exterior, and landscaping, and they have more unknowns. Further, first-time buyers have a steeper learning curve with a single-family home than with a condo, as they are responsible for all maintenance and the associated costs.

Expand your Opportunities:

1. Consider a townhouse, condo, or mobile home a practicable starter home, rather than just a single-family home.
2. Expand your search to include areas outside the City limits of Bozeman, such as Belgrade.

With these minor modifications, a buyer opens up nine additional miles of opportunity and three additional housing types. This shift could bring a first purchase down to a median price of $509,900 (as of March 2025). This adjustment in purchase price could reduce the necessary 20% down payment by nearly $57,000, to $101,908, and significantly lower your monthly payment to just over $3,200 a month, assuming the same interest rate and 1% property tax. These financial benefits can provide reassurance and confidence in your potential housing choices and free up capital to keep your funds accessible for other luxuries.

Housing is necessary and a basic human need, but a single-family home is not the only way to exceed expectations and make a great investment. Without a sweeping windfall, it’s an unrealistic first-home option in Bozeman and could be an economic burden instead of supporting your financial future. 

Explore alternatives:

Townhouses are the closest thing to a single-family home in the market. They finance the same as a stick-built, single-family home, and you own the land underneath the property. The only differentiator is that you share a wall with your neighbor, and if exterior items like the roof or siding fail, you’ll need to work with the neighbor on a replacement plan if you want everything to match. In a townhouse, you are responsible for your water, sewer, insurance, electric, gas, and exterior maintenance, just like a single-family home. As of March 2025, the median price for a Townhouse in Bozeman, Belgrade, or the area in between is $509,900. 

Condos and townhouses can look exactly the same in Bozeman, with the defining element being how the water is metered. In condos, the whole project shares one water hookup with the City, and therefore, they also share the ownership of the land on which they are built. In a Condo, each owner owns an equal percentage of the lot, and the neighbors all participate in exterior maintenance (including maintaining the structure and the landscaping) through Condo Association Dues. These dues cover a range of services, from lawn care to roof repairs, effectively relieving the individual homeowner of these responsibilities. Condos are amazing for first-time buyers, as it is a way to alleviate the risk of unexpected future costs. As the Condo Association takes on the burden of all exterior maintenance through the monthly dues’ commitment, Buyers only need to anticipate interior maintenance costs. That means the furnace, water heater, and appliances. Those big-ticket exterior items, like the roof and siding, are handled by the association. Further, because the association shares one water meter, a buyer only has to consider the additional monthly cost of gas, electricity, and insurance (from the studs in.) Condos do carry a risk. If your neighbors elect not to pay their dues, it will affect the ability of the association to pay their financial obligations and could send the project into disrepair. When financing a condo, your bank will check into the association's health to ensure it has the systems in place to facilitate on-time payments by your neighbors. As of March 2025, the median price for a Condo in Bozeman, Belgrade, or the area in between is $505,250. 

Looking for more elbow room? 

If you are looking for more elbow room, a prefab manufactured home or mobile home could be your ticket into the market. Manufactured homes are built in a dry facility and are stick-built, just not on-site. The upside to this construction type in our market is that it is an excellent way to avoid mold intrusion during construction (a common challenge in our market). When placed, these properties will look exactly like a traditional stick-built house, and may not be easily identified during resale as a prefab construction.

Mobile homes are also built in a dry factory, but are brought into the property on their own axles. Until the axles are removed and the property is strapped to the foundation, the property is considered and taxed as a vehicle. However, once it is attached to the foundation and titled by the County, its status changes from a vehicle to real property, allowing it to be financed like any other home, as long as you can inspect the foundation. This process can be complex, but it's crucial to making a mobile home a viable housing option. As of March 2025, the median price for a de-titled mobile home in Bozeman, Belgrade, or the area in between is $462,500. 

Why would you choose these alternative options? They are less expensive to build, allowing them to be placed on a larger lot that costs more to acquire, and they maintain a lower overall purchase price. A 2,000 square foot mobile home on a large lot with mature trees is still available for under $550,000 in Belgrade. 

Why Belgrade? Mobile Homes have been primarily pushed out of Bozeman as developers saw the value of the land and replaced them with condo and townhouse developments. However, mobile homes are often placed in HOAs with fewer limitations, which means you’ll likely be able to add a shop or customize the lot to your needs, without input from your neighbors. This element of control over your outdoor living space can be a significant factor in your decision to purchase a mobile home over a townhouse or condo.