MISSOULA – The Missoula Organization of REALTORS® (MOR) provided an update on the Missoula housing market in a
virtual presentation of Q3 data from the Five Valleys Housing Market Report on Thursday.
The data suggests the Missoula urban area housing market is experiencing a sight cooling; illustrated by an average 21% decrease in sales across all unit types and a median price increase of about 18% year-over-year.
Additional supporting data is the median1 home sales price of $525,000 held steady from the second quarter to the third
quarter of 2022, and the median percent of original list price compared to final sale is hovering just around 100% across
all unit types at the end of Q3.
Supply of homes for sale continues to remain below ‘normal’ range, with an absorption rate2 of 1.82 months at the end
of September but increasing from 0.94 months in Q3 2021. 75% of the neighborhoods in the urban area are listed as under-supply or less than 3 months. The estimated supply gap in the month of September (using the mid-point of a
normal range), is a deficit of approximately 425 homes across all price points.
The rental market persists with a limited availability of rentals; the vacancy rate declined in 2022 to 1.0% through the
third quarter. This vacancy rates remains well below a ‘healthy’ market of between 5% to 8%. Average rents across all
types saw an increase of 8.6% annually. For example, a two-bedroom house experienced an average rent increase of
7.5% and a two-bedroom multiplex saw a 10.5% increase.
Residential building permits are tracking slightly above the ten-year average of 600 in the city of Missoula. A combination of single family at 107, and multi-family at 566 year-to-date, totals 673. County single family building permits are also close to ten-year average at 142. Final plat approvals through the third quarter created 69 buildable lots
in the city, which is slightly less than half of 2021 results. The county approved 185 lots through the third quarter, which
is only three less than all of 2021.
Mortgage rates have more than doubled in 2022, making the need for assistance programs even more important.
Programs and services reviewed included Down Payment Assistance (DPA) programs and financial education and
coaching services provided by Homeword. For a complete list of these programs and several others please visit Home Financing Resources.
Several exciting and notable Income Eligible Required Home Developments (f.k.a. affordable housing) in Missoula are
nearing completion. Projected for the first quarter 2023, roughly 400 homes are forecasted for occupancy; eclipsing the
total Income Eligible Required units built in the last decade.
MOR is continuing our collaboration with business and community leaders to identify, develop, and implement solutions
to encourage housing at all price points. Earlier this fall, MOR held a Real Estate Education Forum for local legislators,
legislative candidates, and other local government leaders to examine the creation of market rate housing, current
impediments/barriers to development, and development of ideas to reduce our housing deficit. We hope that the ideas
and action plans from the forum can be catalysts for increased housing growth in our communities.
Report Data Sources; Montana Regional MLS, U of M Bureau of Business and Economic Research, the U.S. Census
Bureau, the U.S. Department of Housing and Urban Development, the Montana Department of Labor and Industry, the
Missoula Housing Authority, Homeword, the City of Missoula and Missoula County. The report uses the most recent
available data, which is typically from 2022 but in a few cases from 2019.
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1 Median” describes the point at which half of the sales are above that price and half are below.
2 Absorption rate is calculated by dividing the total number of available homes in the market by the number sold in the
last month. A normal range is a supply of housing to support three to nine months of demand.
