Report: Missoula housing market stabilizing, affordability remains a challenge 

The Missoula area’s housing market appears to be stabilizing after years of declining sales and rising prices, but a low housing supply, particularly of lower-priced homes, remains a challenge, according to the Missoula Organization of Realtors’ annual report.

By the end of 2024, the median sales price of a Missoula-area home was $562,400, a 2.25% annual increase, according to the 2025 Five Valleys Housing Report presented Friday. The increase was a significant drop from the jumps of 15% in 2022 and 28% in 2021, according to the report. 

The number of home sales rose from 924 to 964, the first increase since 2020, said Mandy Snook, broker and owner of Montana Home and Land Company, during the panel presentation at the Missoula Public Library. From 2011 to 2020, the area saw an annual average of 1,352 homes sold, according to the Realtor organization. 

Missoula’s vacancy rate  — the percentage of unoccupied available housing units — remains below a healthy level of 5% to 8% and the housing supply is below the normal range of three to nine months, especially in neighborhoods with more lower-priced homes, the report said. The number of units built annually is about half what’s needed to catch up with the supply deficit and keep up with demand, according to the Our Missoula 2045 Land Use Plan. 

“In 2024, Missoula’s housing market demonstrated resiliency by maintaining value despite nearly three years of interest rates that are nearly double what we saw during the pandemic,” Snook said. “While segments of the market are stabilizing, access to housing remains difficult for a significant portion of our community.” 

Missoula County’s housing affordability index score has stabilized in the last two years after a steep drop starting in 2020, said Matt Gehr with Prime Lending. A score of 100 means income and cost are aligned, while a lower score means the cost is higher. In 2019, Missoula’s index score was 94 before jumping above 100 in 2020 because of low interest rates and subsequently falling to around 50 in 2022, Gehr said. That number dropped slightly from 2023 to 2024 but that’s likely because of a change in how income is calculated, he said. 

“We do have an affordability issue, but it is not continuing to get worse,” Gehr said. 

Varying interest rates are another challenge for home buyers, Gehr said. 

“I’d like to note that while home price, income and interest rates are the major components of the affordability index, the smaller contributing factors such as taxes and homeowner’s insurance are also contributing to a lack of affordability,” he said. “They get a smaller piece of the blame pie, but they are not helping the situation.” 

Last year, the volume of housing sales and median prices varied across Missoula’s neighborhoods, with the Sxʷtpqyen area on Mullan Road west of Reserve Street seeing the highest number of sales, 162, with a median price of $550,000, according to the report. The neighborhood has seen a large amount of new construction following the county and city receiving a federal grant for infrastructure improvements in the area in 2019. 

The Franklin to the Fort neighborhood recorded 103 sales with a median price of $425,000, and the Lower Miller Creek area had 86 sales with a $750,000 median price. The two neighborhoods with median prices below $400,000, the Northside and Westside, saw 30 sales each, according to the report. 

While housing supply in the Missoula area saw a slight improvement in 2024, most neighborhoods are still strapped for enough housing, said Brint Wahlberg, a Realtor with Windermere Real Estate. A healthy supply is three to nine months, and Missoula ended the year with four months of housing supply on the market for the first time since the end of 2015, he said. However, 13 of the 27 neighborhoods the organization tracks have an undersupply of housing, with eight of those neighborhoods recording a below-average median sale price, Wahlberg said. 

“The demand, the need for housing under our median price is driving these low supply rates in these neighborhoods because it’s affordability,” he said “People are trying to find houses in those markets, and it’s very challenging.” 

The Missoula area has an oversupply of homes listed for $1 million or more and an undersupply of homes priced from $300,000 to $750,000, Wahlberg said. Housing priced below $300,000 has “virtually vanished” from the market, with 34 sales recorded last year, he said. 

“If we’re looking to add supply and add housing to meet buyer need, those are the price points where the need is,” Wahlberg said. 

In 2024, the city and county recorded an increase in residential lots approved as part of subdivision preliminary plat reviews, said Paul Forsting, a planner with civil engineer firm IMEG. The 10 approved subdivisions include 1,022 lots, up from 712 in 2023, he said. Of those, 793 lots are in the city and 229 are in the county. 

“This is the most lots we’ve had approved in a 10-year period here, which is great,” Forsting said.  

The number of lots included in final plat approvals, the review required before housing construction, also increased by 159 lots to a total of 299 in 2024, Forsting said. 

In 2024, the city issued 599 residential building permits, 192 more than in 2023. The county, which typically sees minimal fluctuations in building permit numbers, issued 228 permits, an increase of 32 permits.  

Those numbers fall short of the amount identified in the Our Missoula 2045 Land Use Plan needed to catch up with the city’s housing shortage and keep up with population growth. The area will need 1,100 to 1,500 new housing units built annually for the first 10 years and 900 to 1,100 for the following 15 years to get to a healthy vacancy rate, according to the plan’s analysis. 

Last year, Missoula’s rental market saw varying vacancy rates and an overall increase in rents, said Josh Plum with Plum Property Management. 

Vacancy rates vary throughout the year, but overall the vacancy rate increased to a healthy level of 6% at the beginning of 2024 then dropped to about 3% by the end of the year, Plum said. The vacancy rates for rental houses are generally lower than for apartments, but larger homes are often vacant longer because they are more expensive, he said.  

“Trends suggest that renters are increasingly opting for smaller homes or multifamily units, where costs are generally lower,” Plum said. 

The average rent for all types of housing continued to increase last year, jumping about 9% from 2023, according to the report. Average rent for a two-bedroom apartment and a three-bedroom single-family home both increased by more than 10%, Plum said. 

Last year, the Missoula Organization of Realtors began tracking data related to supportive housing, said Karissa Trujillo, Homeword executive director. Data from the Missoula Housing Authority showed a decrease in the rate of people who received housing vouchers able to use them to find an eligible rental from 75% before 2020 to 50% in 2024, Trujillo said. 

The number of people on the waitlist for vouchers has also sharply increased in the last four years, Trujillo said. More than 2,000 people are on the Missoula Housing Authority wait list, according to the data included in the report. 

The Missoula Organization of Realtors collects housing data to highlight trends and challenges and help support community partners, said Snook, the broker with Montana Home and Land Company. 

“We recognize that timely, comprehensive housing data is a crucial foundation for meaningful discussions and innovative solutions,” she said. 

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