This Montana Town Has ‘No Good Entry-Level Homes’ for Buyers—but an Abundance of Luxury Rentals

It has a population of roughly 55,000 people, but Bozeman has become one of the fastest-growing cities in Montana, and it needs its housing supply to keep up with demand.

Bozeman’s median household income in 2023 was $79,903, and the owner-occupied housing unit rate was 44.6% between 2019 and 2023, according to the US Census Bureau. This means over half the housing units are renter-occupied, which is atypical for smaller cities or towns—especially in the West.

A low owner-occupancy rate in a desirable, fast-growing city like Bozeman often correlates with affordability issues or limited for-sale housing stock. This suggests there’s already solid demand for rentals, making it a strategic location for new luxury rental developments like Buffalo Run.

This brand-new collection of rentals has been launched by the Rockefeller Group to “pioneer a new standard of living.” The complex, set against the backdrop of the Gallatin Mountains, comprises 30 buildings with a clubhouse.

Bozeman real estate broker Chase Heiland tells Realtor.com® that, at the moment, he believes there is enough housing supply, but the city is playing “catch-up” due to an affordability issue.

“There is no good entry-level home or price point in Bozeman, with the majority of new construction homes in the area at a more entry-level price point being built in Belgrade,” he says.

Heiland adds that there are many luxury apartments being built around Bozeman, with many offering incentives to get renters to sign year-long leases.

“There are still thousands of doors being built that will be released in the next year or two as rentals,” he says. “That has driven down rental prices pretty dramatically, as well as affected the condo resale market, since those are most entry-level price points for buyers.

“Downtown still commands incredible rental rates for higher-end and amenity-rich properties, especially when it comes to monthlong furnished rentals and short-term rentals, however.”

But, with the introduction of more luxury homes, like Buffalo Run, the surrounding real estate has the potential to drive up pricing in the area.

“Luxury developments often boost neighborhood desirability and can push rents higher, but if the surrounding area has enough rental supply, the effect may be minimal,” says Realtor.com economist Jiayi Xu.

“Luxury rental development in small cities presents distinct advantages. These areas attract renters seeking natural surroundings, less congestion, and a strong sense of community, combined with modern, upscale living.

“Furthermore, lower land, labor, and regulatory costs reduce development and management expenses, resulting in higher investment returns compared to larger urban markets.”

Abundance of luxury rentals could drive down prices

Buffalo Run wants to capitalize on Bozeman’s innate beauty and amenities, making them more accessible and intimate for luxury buyers and renters.

Set on over 20 acres just 10 minutes from downtown Bozeman, Buffalo Run introduces 237 new rental residences to the fast-growing Montana city. The mix of townhomes and apartments ranges from studios to three-bedroom homes, all with access to shared open space and nature trails. Designed by a Denver-based firm, the residences offer in-unit Samsung washers and dryers, scratch-resistant flooring, and optional garage or private garage parking.

“Montana represents an exciting frontier for Rockefeller Group, and we’re proud to expand our presence in the state with our first development in Bozeman,” says Jay Despard, senior managing director and head of Rockefeller Group’s Rocky Mountain Region.

“Buffalo Run exemplifies our commitment to delivering best-in-class residential communities in dynamic, growing markets. With its thoughtfully designed residences, extensive amenities, and unbeatable location between Bozeman’s vibrant downtown and world-class outdoor recreation, Buffalo Run is a game-changer for the region and sets a new standard for luxury living in Southwest Montana.”

Heiland says that as more of these type of properties continue to be developed, it will drive down rental prices.

“I have had numerous buyer clients recently decide to continue renting rather than purchasing a property,” he reports. “There are two main factors to this that I have seen. First, there is more inventory now than there has been since 2019, both in homes for sale and rentals. Especially when it comes to rentals, because of the increase in availability, I have had clients able to negotiate their leases to something much more favorable.”

Heiland notes that more Montana clients are waiting longer to purchase a home, trying to gauge whether more favorable homebuying conditions arise.