New Year, Fresh Market Activity
The first month of the year delivered an optimistic shift after a lackluster fourth quarter carried over into early 2026.
The year 2025 closed with Q4 sales down nearly 4% compared to 2024. That slowdown extended into January, with monthly closed sales down 14.8% year-over-year—marking the lowest monthly sales volume since 2013.
A closer look reveals that this decline was concentrated entirely in the single-family market. January single-family home sales fell 23% year-over-year, while condo and townhouse sales remained flat.
Because closed sales typically lag contract activity by 30–40 days, we turn to new pending sales for a clearer view of current momentum. January data shows a promising rebound, with new pending sales up 15% year-over-year and continuing a steady three-year climb back toward pre-COVID activity levels. Notably, buyer interest returned strongly to the single-family segment, with newly pending single-family homes up 67% for the month.
Supply, Mortgage Rates, & Pricing
A key driver of renewed momentum appears to be mortgage rates. In January, the 30-year fixed rate dropped to a three-year low of 6.11%.
Buyer interest was further supported by an increase in available inventory and a broader pullback in pricing. January saw a 60% month-over-month increase in new listings—predominantly single-family homes—and a 12% year-over-year increase in end-of-month inventory.
Median sales price declined 8% month-over-month and was notably down 15% compared to January of last year.
Pricing Trends Approach Equilibrium
For the first time since COVID, home prices are approaching the natural market growth trend observed during the five years prior to the pandemic.
From 2015 to 2020, median home prices in the Bozeman area increased at an average annual rate of 9.2%, rising from $306,000 in 2015. Extrapolating from that trend suggests a projected median home price of approximately $737,000 for 2025. The actual median sales price for 2025 came in at $780,000—about 5-6% above that long-term trend.
However, January 2026 pricing tells a different story. The median sales price for the month was $712,500, placing it roughly 3% below the pre-COVID growth projection. Market pricing is now broadly aligned with historical growth trends.
Another sign of moderating prices is the percentage of final list price received by sellers. In 2024, sellers averaged receiving 97.7% of asking price. That figure dipped slightly to 97.3% in 2025, and softened further to 97.2% in January 2026.
Conclusion & 2026 Outlook
With declining mortgage rates, prices normalizing toward pre-COVID trends, and a meaningful increase in supply, the market is well positioned for renewed activity.
Seller hesitancy has eased in tandem with more realistic expectations for listing price point, contributing to a healthier flow of listings at more approachable price points. On the buyer side, lower mortgage rates provide incentive to act, while increased inventory offers greater choice and negotiating leverage.
Proactive sellers may find an advantage in listing early, ahead of a potential influx of competing inventory later in the year. Qualified buyers, meanwhile, have an opportunity to take advantage of softer pricing and favorable financing before seasonal demand potentially reintroduces upward pricing pressure this summer.
