2026 Five Valleys Housing Report
Section-by-section summary | Missoula Organization of REALTORS® (MOR)
The 2026 Five Valleys Housing Report examines Missoula’s residential real estate market using primarily 2025 data, covering home sales, prices, affordability, housing inventory, new construction, population trends, and rental housing. Its central conclusion is that the Missoula housing market is continuing to stabilize, with increasing inventory, modestly declining prices, and improving sales activity, although affordability remains a significant challenge.
Missoula Housing Continuum
The Missoula housing continuum illustrates the range of housing options available to residents, from emergency shelter and supportive housing to market-rate rentals and homeownership. The continuum distinguishes between housing requiring public or nonprofit support and housing that is financially self-sustaining. Intermediate options include nonprofit rentals, subsidized market-rate rentals, and conditional pathways to homeownership, such as community land trusts and deed-restricted housing. The framework emphasizes that a healthy housing market requires a variety of housing types to accommodate residents with different incomes and circumstances.
Missoula Five Valleys Geographic Areas
The report distinguishes between two geographic areas used for housing analysis: the Missoula Urban Area, which provides the basis for residential sales statistics, and the broader Missoula County Planning Areas, which are used to examine housing supply, subdivision activity, and development trends. The planning areas encompass Missoula and surrounding communities, including Lolo, Seeley-Swan, Potomac-Greenough, Bonner-Milltown, and other outlying areas. Understanding these geographic distinctions is important because housing prices, inventory, and development activity can differ substantially between neighborhoods and surrounding rural communities.
Missoula Urban Area Sales
Missoula’s residential real estate market experienced a modest decline in median sales prices during 2025 while total transactions increased. The median sale price decreased from $562,400 in 2024 to $550,000 in 2025, a reduction of approximately 2.2%. Meanwhile, the number of residential sales increased from 984 to 1,029, representing a 4.6% increase and the second consecutive year of improving sales volume. Despite this recent price moderation, the median home price remains approximately 57% higher than in 2020, when it was $350,000. These trends suggest that the market is gradually adjusting following several years of rapid appreciation, with improving transaction activity but home prices remaining historically elevated.
Sales Volume by Neighborhood
Housing market conditions varied across Missoula neighborhoods during 2025, although a general relationship emerged between changes in median sales prices and transaction volumes. Neighborhoods experiencing price declines generally recorded increased sales, while areas with rising prices tended to experience fewer transactions. In Lolo, for example, the median sales price declined slightly from $555,000 to $550,000 while sales increased from 45 to 59. In the Lewis & Clark neighborhood, median prices dropped from $610,000 to $550,000 while transactions increased from 21 to 23. Conversely, Grant Creek/Butler Creek experienced an increase in median prices from $764,440 to $775,000 while sales declined from 36 to 27. These patterns suggest buyers are responding to price adjustments, although conditions remain highly localized.
Percentage of Sales by Financing Method
Conventional mortgages remained the dominant financing method for Missoula-area home purchases in 2025, followed by cash transactions, with FHA, VA, USDA, and other financing programs accounting for smaller shares. One particularly noteworthy trend was the increasing prevalence and value of seller concessions, which can help purchasers offset closing costs, mortgage-rate buydowns, or other transaction expenses. The percentage of sales involving seller concessions increased from 44% in 2024 to 46% in 2025, while the median concession increased substantially from $5,275 to $8,000. This trend suggests sellers are becoming more willing to negotiate and provide financial incentives, another indication of a market shifting toward more balanced conditions.
Housing Affordability Index
Housing affordability improved in Missoula during 2025 but remains a significant obstacle for many households. The Housing Affordability Index increased to 65 for buyers making a 5% down payment and 82 for those making a 20% down payment, compared with 52 and 62, respectively, in 2024. These improvements reflect a combination of lower mortgage interest rates, slightly lower median home prices, and higher median family income, which increased to $106,100. Nevertheless, purchasing a median-priced $550,000 home still required estimated monthly housing payments of $4,092 with 5% down or $3,235 with 20% down, including principal, interest, taxes, and insurance. Both affordability indexes remain below 100, indicating that the median-income family cannot comfortably afford the median-priced home under the report’s affordability assumptions.
Market Supply
The report evaluates residential housing inventory using the absorption rate, which estimates how many months it would take to sell the available homes at the current pace of sales. An inventory level below three months indicates an undersupplied market, while three to nine months represents a normal market. Missoula’s housing supply has gradually improved from the exceptionally tight conditions experienced during the pandemic-era housing boom, although inventory remains relatively constrained. By late 2025, the overall market was operating near the lower end of the normal inventory range. Increasing supply is contributing to greater buyer choice, more opportunities for negotiation, and reduced upward pressure on home prices.
Market Supply by Neighborhood
Housing inventory varied considerably among Missoula neighborhoods at the end of 2025, creating distinctly different conditions for buyers and sellers. The Lewis & Clark neighborhood had approximately one month of inventory, indicating a strong seller’s market, while Lolo had 2.5 months and Southgate had three months. Lower Miller Creek had 4.29 months of supply, while Franklin to the Fort had 5.6 months, both within the normal inventory range. By contrast, the Sx͏ʷtpqyen/Mullan area had approximately 10.1 months of inventory, indicating an oversupplied market relative to other neighborhoods. These differences demonstrate that broad market trends do not necessarily reflect conditions within individual neighborhoods and that local inventory is an important consideration when pricing or purchasing property.
Missoula County Planning Areas: Supply by Price Range
The distribution of available homes by price range reveals an imbalance between more affordable housing and higher-priced properties. As of December 31, 2025, the report identified 490 active residential listings, representing approximately 5.27 months of total inventory. Supply was particularly limited in the $300,001–$600,000 range, where absorption rates were approximately 3.05–3.56 months and the number of available listings fell substantially below theoretical normal market levels. In contrast, homes priced above $1 million had approximately 17.83 months of inventory, representing a substantial oversupply. This disparity highlights a fundamental challenge in the Missoula housing market: available inventory is not necessarily concentrated in the price ranges where housing demand is greatest.
Subdivision Approvals
Subdivision approvals provide insight into the potential future supply of residential building lots throughout Missoula and surrounding areas. The report distinguishes between preliminary plat approval, which establishes the conditions a developer must satisfy, and final plat approval, which certifies those conditions have been met and allows development to move toward permitting and construction. The accompanying charts illustrate substantial fluctuations in subdivision activity over time, including recent increases in preliminary approvals within the City of Missoula. However, preliminary approvals do not immediately translate into buildable lots or completed homes. The difference between preliminary and final approvals emphasizes that infrastructure requirements, financing, development costs, and regulatory processes can delay the delivery of new housing.
Residential Building Permits Issued
Residential building permit activity provides another measure of the housing construction pipeline in Missoula County. Through the fourth quarter of 2025, the City of Missoula issued 587 residential building permits, compared with 337 in the unincorporated portions of Missoula County, based on the report’s combined housing-type categories. The historical data show considerable volatility in city permit activity, including a pronounced spike earlier in the decade, while permits in the unincorporated county generally increased more gradually. Continued construction activity is important for addressing long-term housing demand, but the number of permits issued does not necessarily correspond directly to the number of completed or immediately available homes.
Population
Population growth remains an important driver of housing demand in Missoula County, with migration accounting for a substantial portion of recent increases. The report distinguishes between natural population growth, representing births minus deaths, and net in-migration, representing people moving into the county minus those leaving. The data show that migration has been the more significant source of growth in recent years, particularly during periods of elevated population increases. In 2024, the county recorded approximately 867 additional residents, including 719 from net in-migration and 148 from natural population growth. Although growth has moderated from earlier peaks, continued migration contributes to ongoing demand for both rental housing and homeownership.
Missoula Housing Authority Wait List
The Missoula Housing Authority’s Housing Choice Voucher program helps qualifying low-income households obtain housing in the private rental market by subsidizing the difference between an affordable tenant contribution and the rental cost. Participants generally contribute 30% of their income toward rent, with eligibility limited to households earning no more than 50% of area median income. The report shows that demand for these vouchers consistently exceeds available assistance, resulting in a large and generally increasing waiting list. The waiting-list trend highlights the continuing shortage of housing affordable to lower-income residents, even as inventory and market conditions improve for some buyers and renters.
Community Land Trust
Community Land Trusts provide an alternative pathway to affordable homeownership by separating ownership of the home from ownership of the land beneath it. Homebuyers purchase their homes while leasing the land from a nonprofit organization under a long-term agreement designed to preserve affordability for future buyers. In Missoula, three Community Land Trust homes were sold in 2025 at a median price of $257,028, and 27 homes were identified in the 2026 supply pipeline at a median price of $193,718. The report also notes that 150 Missoula households joined the Community Land Trust interest list between May and December 2025. These figures demonstrate substantial interest in permanently affordable homeownership options and the potential for land trusts to serve households priced out of the conventional market.
Vacancy Rates and Average Rents — City of Missoula
Missoula’s rental market has experienced increasing rental rates alongside fluctuating vacancy levels, reflecting changes in both housing demand and the availability of rental units. The report tracks average rents and vacancy rates across different housing types and unit sizes, including single-family houses, duplexes, and multifamily apartments. Although rents remain elevated relative to earlier years, recent vacancy fluctuations suggest that additional rental inventory has provided some relief from the exceptionally tight conditions seen previously. The report identifies vacancy rates of approximately 5%–8% as characteristic of a healthy rental market. However, conditions differ among property types and unit sizes, making it important to evaluate individual rental segments rather than relying exclusively on citywide averages.
Rental Data Collection
The report emphasizes the importance of obtaining current and comprehensive rental market information from property managers and private landlords. The Missoula Organization of REALTORS® is encouraging rental property owners and managers to participate in its 2026 rental data collection effort, which is intended to improve understanding of rental rates, vacancy conditions, and housing availability. Broader participation can help provide a more representative picture of the local rental market, particularly where smaller privately owned properties may not be fully reflected in existing data sources. Reliable rental information is important for housing policy, development planning, investment decisions, and assessing the affordability challenges facing Missoula residents.
Who’s Looking to Move to Missoula?
Online housing search data indicate that Missoula continues to attract significant interest from potential buyers outside Montana. In 2025, approximately 62.9% of the measured Realtor.com search activity originated from other states, compared with 11.1% from elsewhere in Montana and 24.4% from within Missoula. International searches accounted for approximately 1.6%. Phoenix, Arizona, represented the largest identified outside metropolitan source during the fourth quarter of 2025, followed by Denver, Colorado, and Salt Lake City, Utah. Other notable sources included Seattle, Washington, and several California communities. The geographic distribution suggests Missoula continues to attract interest from people in larger metropolitan markets, although online searches do not necessarily translate into actual relocations or purchases.
Missoula Housing Report Summary for 2025
The report concludes that Missoula’s residential housing market is continuing to stabilize following several years of unusually rapid appreciation and constrained inventory. The principal indicators include a roughly 2% decline in median sales prices, an increase in residential sales for the second consecutive year, greater use of seller concessions, and continued absorption of multifamily housing inventory. Increasing supply is helping restore more balanced conditions between buyers and sellers, although affordability challenges remain substantial, particularly for moderate- and lower-income households. Overall, the findings suggest a market undergoing gradual normalization rather than a dramatic correction, with neighborhood conditions, housing types, and price ranges continuing to influence individual market outcomes.
Overall Takeaway
The most significant finding of the 2026 Five Valleys Housing Report is that Missoula’s housing market is becoming more balanced, but it is not necessarily becoming affordable. Sales activity is improving, prices have moderated slightly, housing inventory is increasing, and sellers are offering larger concessions. However, the supply of homes affordable to typical local households remains limited, especially compared with the availability of higher-priced properties. Continued population growth, strong interest from outside markets, and persistent demand for rental assistance underscore the need for additional housing development across a broad range of price points.
Source: 2026 Five Valleys Housing Report, Missoula Organization of REALTORS®, 23-page presentation. The summaries reflect the data and conclusions presented in the report, primarily for calendar year 2025.