How a population boom changed North Dakota’s housing markets

North Dakota’s population has grown at a historic clip this century. The state’s housing sector responded with a big increase in home construction. As a result, North Dakota has remained one of the most affordable states to rent or buy a home. But in North Dakota’s largest population centers, and for the state’s lower-income households, affordability challenges persist.

Housing is the largest line item in most household budgets. Across the nation, shelter costs have outpaced inflation for years. They’ve risen in North Dakota as well. The Federal Reserve Bank of Minneapolis tracks housing conditions throughout our district, which includes North Dakota. Understanding these conditions is central to our efforts to understand how local economies are functioning. This research informs our work to support the Federal Reserve’s dual mandate from Congress of promoting maximum employment and stable prices.

The housing industry in North Dakota has faced a unique set of circumstances. The state saw very little population growth for the last 15 years of the twentieth century. The twenty-first century brought an energy boom—and a boom in population. Two decades after the population explosion began, how has the dust settled in the state’s local housing markets?

A standout period of population growth

According to the U.S. Census Bureau, from 2000 through 2024, North Dakota’s population increased by about 154,000 people, or 24 percent. That was faster than the nation’s 21 percent growth rate over the same period.

Four aspects of North Dakota’s population growth stand out. First, it came after a long period of slow to no population growth in the state. From 1980 through 2000, the state’s population slightly shrank. Second, the state experienced a period of particularly intense growth from 2009 through 2015. In some of those years, North Dakota’s annual rate of population growth was two to three times higher than that of the nation.

Third, this surge has, so far, tapered into a steadier rate of growth. That’s different from other North Dakota population booms. After the peaks of those earlier growth periods, the population leveled off or even declined. Since 2020, the state’s growth has continued, though at a slower clip. There were 2.2 percent more North Dakotans in 2024 than there were in 2020, placing the state slightly behind national population growth over the same time period.

Finally, North Dakota’s twenty-first century population growth has not been evenly distributed around the state. From 2000 to 2020, some boomtowns located in the Bakken oil patch, like Watford City and Williston, more than doubled in residents as oil production surged. The population of Dickinson, another town in the oil patch, grew by nearly half. While the growth in the Bakken area was substantial, most of the state’s growth actually occurred in Fargo and Bismarck-Mandan, the state’s two largest population centers. Grand Forks and Minot, the state’s other large population centers, grew at slower rates than the nation as a whole. Population declined in the rest of the state.

Around the beginning of the COVID-19 pandemic, the story changed. Bismarck-Mandan and Fargo’s growth has continued to outpace the nation’s, while Watford City and Williston’s population growth has paused.

Housing eventually catches up to population

During the period of the most intense population growth, housing production fell behind the increase in population. Fourteen of the state’s counties accounted for 90 percent of its population increases during this period. They had 23 percent more people in 2015 than they did in 2009, but the U.S. Census Bureau-estimated number of housing units in these counties only increased by 17 percent.

The housing sector eventually caught up. Over the course of the entire period of 2000–2024, the state eventually gained relatively more housing units than it did people.

This doesn’t mean the state now has a “surplus” of housing, however. For starters, some of the population gain in North Dakota’s growing counties came from people moving within North Dakota. These movers generally don’t bring a house with them. As a result, they generate new, localized housing demand without increasing the state’s overall population.

Second, the population in North Dakota grew older overall during this time period. The number of people ages 18 and older in the state increased by 29 percent—much closer to the state’s 32 percent increase in housing units than its 24 percent increase in total population.

Many economists argue that rising housing costs in the nation are attributable to a lack of housing supply. Some have developed a method for estimating potential housing “undersupply” levels within every state. Addressing this undersupply, they argue, would lead to a meaningful increase in housing affordability. Three recent estimates from the American Enterprise Institute, Up For Growth, and the McKinsey Institute for Economic Mobility suggest that North Dakota would need to increase its housing supply by about 0.5, 0.9, or 2.1 percent, respectively, to reach their authors’ affordability goals. By comparison, the estimates for neighboring South Dakota are 0.9, 1.8, and 4.9 percent.

The construction, along with income growth in North Dakota, also contributes to the state’s high marks in many organizations’ affordability calculations for both homeowners and renters. Despite North Dakota’s relative affordability, when we convened housing experts in Bismarck in late 2025 at our event, Housing Needs and Opportunities in North Dakota, nobody was interested in resting on the state’s laurels. As those experts pointed out, many North Dakotans still struggle to find and afford housing that meets their needs.

$4,000 Apartments

The struggle to find a home was particularly hard when the oil boom kicked off. From 2000 through 2024, Watford City’s population quadrupled from about 1,400 people to 6,000 people. Brent Sanford was the city’s mayor during some of its most intense growth.

“Apartments were going for $4,000 a month, houses for $12,000 per month,” he said at our event. He described how the oil companies packed multiple employees into each bedroom.

But oil-field workers weren’t the only ones coming to town. Enrollment in Watford City schools greatly increased as new families arrived, he said, drawn by the economic opportunities. With so much demand for the city’s homes, he wondered aloud as he recalled that period, “Where do the cops, teachers, and social workers live?”

Over time, the skyrocketing rents attracted national developers. Apartments were built, and rents came back down, he said. The number of housing units in Watford City multiplied from about 600 in 2000 to nearly 3,500 in 2024. The increase largely came in the form of multifamily housing stock, with about 2,200 units of the city’s roughly 2,900-unit net increase being in structures that contain at least three homes.

The increase in homes was significant, but not large enough to meet the needs of Watford City’s longtime or new residents, Sanford said. He pointed to decreasing affordability in the homeownership market as one piece of evidence. According to the most recent American Community Survey five-year estimates, the median value of homes in Watford City was $408,500—nearly four times the city’s median household income, and more than six times the median earnings for an elementary school teacher in western North Dakota.

Price isn’t the only obstacle for people looking to move. Sanford offered his mother’s situation as an example. She’d like to move out of the large family home she’s occupied for 50 years. But her only options for living in a smaller home are in larger cities, he said, hours away from friends and family.

However, Janelle Moos, the state policy director for AARP North Dakota, noted that even larger cities often lack enough housing for aging residents who may want to purchase or rent smaller, more manageable homes. “I think of some of our volunteers in Grand Forks who lived in 3,000-square-foot houses,” she said. “It took them 18 months to downsize.”

When communities change their local regulations to enable “missing middle” housing, like small apartments, duplexes, or accessory dwelling units, they are also addressing the needs of seniors, Moos said.

Particular challenges for low-income renters

Speakers at our event pointed out that low- and moderate-income North Dakotans also face challenges finding housing, which can have profound effects on their lives. Housing is foundational to all positive life outcomes, said Dan Madler, chief executive officer of Beyond Shelter, Inc., a Fargo-based nonprofit affordable housing developer. “Housing is connected to nearly every aspect of life, from health, education, and employment to child care, transportation, public safety, and wealth creation. Without housing, nothing else works. Everything is interrelated,” he said.

Lorna Fogg, vice president of finance and development at RTHawk Housing Alliance, noted that this means that the needs of the local population should be considered in housing designs. She described a range of projects she’s worked on in reservation communities over the past few decades.

While other speakers at the event described local regulations that can limit the types of housing that can be built, Fogg described how compliance requirements can sometimes prevent resident success. “Let’s say you’ve got a returning felon who has nowhere to live in a community,” she said. “If they move in with their grandma, their grandma could become out of compliance with her lease.” Both could be evicted and wind up homeless, she said.

Rental affordability varies across the state

A common measure for gauging the level of housing-related stress in a community is the share of housing cost burden. Households experience housing cost burden when they spend 30 percent or more of their gross income on housing. Nationwide, nearly half of all renters fell into this category in 2024.

The share is substantially lower in North Dakota, where about a third of all renter households experienced housing cost burden in 2024. However, the story in North Dakota varies considerably by region and income level.

In Williston, Dickinson, and Minot, the share of housing cost burden among renters dropped from 2019 through 2023. Two factors likely contributed. The housing supply caught up to population growth, putting downward pressure on rents. Meanwhile, the median renter income grew significantly in these cities, from around $41,500 to around $50,000.

In the Bismarck and Fargo regions, however, the share of housing cost burden increased during the same time period. The housing supply grew in line with population growth in these regions, just as it did in the oil-producing part of the state. But in Bismarck and Fargo, renter incomes did not grow significantly. The shares of housing cost burden among renters there increased from 43 and 37 percent in 2019 to 55 and 41 percent in 2023, respectively.

Shares of housing cost burden are higher for lower-income households. For example, across the state, the share is 55 percent for households earning 30–50 percent of the median household income in their area.^* The most recent data for the state show the share at a long-term low after it peaked during the population boom.

More housing could lower rents, prices further

The experts at our event argued that North Dakota would need to continue building new housing in order to maintain or improve affordability levels. Sanford noted that new technology like 3D printing or increased adoption of techniques like modular construction could bring costs down and drive production up.

Fogg noted that factory-built housing is already becoming more popular in rural areas, where construction can be significantly more expensive than in urban regions. Without local contractors to draw on, labor must be imported alongside materials. That means the time savings offered by a manufactured or modular approach are all the more significant.

All of the experts on our panel agreed that flexibility is key for any policymakers interested in supporting efforts to increase the housing supply. Different communities may need different amounts and types of housing. The best way to finance or build that housing can vary, too. North Dakota’s Housing Incentive Fund was cited as a funding source that allows developers and communities to finance projects that meet local housing needs.

The panelists also agreed that regardless of the financing strategy or type of housing under discussion, collaboration is key for successful housing efforts. “No one entity is [addressing affordability] on its own,” Madler said. “No matter what type of housing you're developing, you need a group of stakeholders and partners, and strong relationships, to move something forward.”

Endnote

* The median income ranges from $102,000 in East Central North Dakota-Jamestown City to $109,000 in West North Dakota-Dickinson & Williston Cities. For comparison, the area median income for a family of four in the state of North Dakota in 2024 was $103,900.