Remote work, interest rates, building costs surged home prices

David Erickson

Western Montana’s housing market got roiled by several factors during the pandemic and the ensuing economic downturn, according to Patrick Barkey, an economist and the director of the Bureau of Business and Economic Research at the University of Montana.

“What happened was an unexpected, powerful surge in demand which was uncharacteristic of many other economic downturns,” Barkey explained. “That’s one reason why that caught a lot of people by surprise.”

The increase in demand was caused by the way COVID changed the way people work and live, he noted.

“Part of that demand was fueled by people’s desire to change their housing because they were either working from their house or were anxious to get away from people or were able to work in a different place than where their office was because of remote technology,” Barkey explained.

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The increase in demand for housing was not unique to Montana, he said, and occurred pretty much everywhere in the nation.

“The surge in demand was also fueled by extremely low mortgage interest rates,” he said. “So like I say, it was an odd occurrence in many ways.

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