Is Montana an Affordable Place to Live?

Evaluating the affordability of a place requires a personalized assessment, as what is affordable for one individual or family may not be for another. Understanding the various components of the cost of living, from housing to taxes, provides a clearer picture of financial viability in any given location.

Understanding Montana’s Cost of Living

Montana’s overall cost of living is slightly higher than the national average, placing it somewhat in the middle range. While not exceptionally cheap, it is also not among the most expensive places to reside.

Broad factors influencing costs in Montana include its low population density, vast geographical expanse, and economic drivers, which often relate to natural resources, agriculture, and a growing tourism sector. The state’s unique landscape, characterized by mountains and wide-open spaces, contributes to varying costs depending on proximity to urban centers or popular recreational areas. For example, transportation costs tend to be higher due to the distances between towns and cities.

Key Household Expenses

Housing represents a significant portion of household expenses in Montana, generally exceeding the national average. The median home value in Montana was $540,700 in January 2025, an increase of 6.6% from the previous year. For renters, the average rent in Montana was $1,411 per month as of August 2025, while a two-bedroom unit averaged around $1,716 per month statewide.

Utility costs in Montana are generally reasonable, often falling below national averages, though they can fluctuate seasonally due to heating needs in colder months. The average monthly cost for basic utilities, including electricity, gas, water, and sewer, is around $275. Internet plans with 50 Mbps+ speed typically add around $72.90 to monthly expenses.

Grocery costs in Montana are slightly higher than the national average. An individual might expect to spend approximately $331 per month on groceries.

Transportation expenses in Montana are notably higher than the national average. This is largely due to the state’s vast distances, making car ownership nearly essential for most residents. While gasoline prices are often slightly lower than the national average, the overall cost is driven by the need for personal vehicles and associated maintenance.

Healthcare costs in Montana are slightly lower than the national average. The average annual per-person cost for healthcare is estimated to be around $8,289. Health insurance premiums and out-of-pocket medical expenses contribute to this overall cost, which can vary based on individual health needs and coverage plans.

Montana’s Tax Environment

Montana operates a graduated state individual income tax system, with rates ranging from 4.70% to 5.90%. These rates apply to all income generated within the state, encompassing wages, investments, and business earnings.

Property taxes in Montana are assessed based on the market value of real property. The effective property tax rate on owner-occupied housing value is approximately 0.69%. The Department of Revenue re-evaluates property values every two years for tax purposes.

Montana does not impose a statewide sales tax, though some local jurisdictions may levy taxes on tourism-related sales. Other taxes include vehicle registration fees, which vary significantly based on the vehicle’s type, age, and weight. Some counties may also impose a local option tax.

Regional Cost Differences

The cost of living in Montana varies significantly by region. Major urban centers generally present higher living expenses. Bozeman consistently ranks as the most expensive city in Montana, with high average rent and median home sale prices.

Missoula also features higher costs. Billings offers a more balanced cost of living, making it relatively more affordable than Bozeman. Helena and Great Falls tend to have lower costs compared to Bozeman and Missoula, with Great Falls often considered the most affordable major city.

Rural areas across Montana generally offer lower housing and overall living costs than these urban hubs. However, residents in these areas may face higher transportation expenses due to longer distances to services and limited public transportation options. The trade-off between lower housing costs in rural settings and potentially increased commuting or service access expenses is an important consideration for those evaluating affordability.

Income and Affordability Considerations

The median household income in Montana was $69,922 in 2023, while the average annual household income was $94,544. These figures provide a benchmark for evaluating whether typical earnings in the state align with the cost of living.

Wages can vary across different industries prevalent in Montana. Sectors such as tourism, agriculture, and natural resource extraction historically form a significant part of the state’s economy. Newer industries, including technology and healthcare, are also contributing to the wage landscape.

Comparing these income levels to the presented cost of living figures highlights the financial landscape in Montana. While some expenses, like utilities, are below the national average, housing and transportation costs can be higher. This relationship between income and expenses is a key determinant for individual affordability, as higher incomes are generally required to comfortably cover expenses in more expensive areas like Bozeman.