The critical Senate race in Montana is being fueled by the state's hot housing market.

• The Senate race between Sen. Jon Tester and businessman Tim Sheehy is among the most competitive in the country, with the outcome potentially deciding which party holds control of the Senate.
• Despite a 66% increase in housing prices in Montana over the past four years, the state's residents face affordability challenges due to stagnant wage growth.
• Out-of-staters flocking to Montana and a labor shortage have contributed to high prices.

Near the northern edge of Missoula, Montana, a significant number of condominiums and duplexes have emerged in the past three years.

The Montana Association of Realtors' president, DJ Smith, stated that the new zoning laws are part of a larger effort to make affordable housing accessible to Montanans who have been unable to afford it due to market prices.

It has become increasingly difficult for Montanans to find an affordable home that meets their requirements, according to him.

The influx of out-of-state residents moving to Montana has led to a surge in demand for housing, which has resulted in a shortage of labor. This has resulted in the construction of more condos and duplexes, and has become a contentious issue in a Senate race that could determine who controls the chamber.

No incumbent Democrat faces a more challenging re-election than Sen. Jon Tester, who must win over a state that Trump won by 16 percentage points in 2020.

The Cook Political Report recently shifted the race from a toss-up to leaning Republican, while a recent AARP poll showed Sheehy leading by 8 points, which is within the margin of error.

Montanans who have been priced out of housing due to the influx of people moving to the state are a key focus of Tester's campaign, with a particular emphasis on providing affordable housing solutions.

Tester stated during a June 9 debate hosted by the Montana Broadcasters Association that there is an influx of wealthy individuals entering the state with the intention of purchasing it and transforming it into something it is not.

In Montana, Tim Sheehy, the Republican nominee, founded an aerial firefighting company and is a former Navy SEAL. He claims high housing costs are due to inflation, which he attributes to laws supported by President Joe Biden and passed by Tester.

"The biggest challenge we faced while expanding our business was persuading people to move to Montana and deal with the high housing costs, which are a direct outcome of the policies being implemented by the Biden administration, as Sheehy stated during the discussion."

Across the country, housing costs and inflation are major concerns, but nowhere is it more challenging than in Montana, which has been rated the least affordable state for home buyers by the National Association of Realtors. In the past four years, housing prices in Montana have increased by 66%, outpacing the 50% national average, according to the U.S. Federal Housing Industry Price Index.

Some Montanans are unable to afford their communities due to the influx of new residents who have sold their homes in more expensive areas and are able to buy in cash.

The median income for a household in Montana is $67,631, according to the U.S. Census Bureau. As a result, the median home price in Missoula, $568,377, is high for the average Montanan, but it's an attractive option for those looking to leave higher-cost states for Montana's mountains, national parks, and ample space.

"Smith stated that individuals in Colorado and California were willing to sell their homes for more than a million dollars, allowing them to accumulate significant equity. This has resulted in a record number of 30% of homes in Montana being purchased with cash."

The labor shortage in the state affects subcontractors, such as plumbers and electricians, which results in higher costs for construction projects, said Andrew Weigand, owner of Butler Creek Development.

Using a pool of three to four subcontractors instead of 30 to 40 will result in a less competitive market compared to other regions of the country, according to him.

The problem, according to Weigand, may worsen as many subcontractors age, and there are fewer individuals available to replace them.

""Our trades are aging, with many of them having been in operation for 20 or 30 years. As a result, they are approaching retirement. Unfortunately, there is a lack of interest among young professionals and young people in taking on these jobs to meet the demand," he stated."

Montanans facing difficulties in affording a home have several proposals from Tester, including grants to increase housing and aid with home repairs, as well as a tax credit to motivate mobile home park owners to sell their property to coalitions of Montana residents instead of developers who could use the land to construct costlier homes.

In the June 9 debate, Sheehy argued that expanding trade programs in the state would alleviate the shortage of contractors needed to build homes, despite previously blaming high housing prices on inflation.