Missoula housing market sees lower prices, increase in inventory
Martin Kidston
(Missoula Current) Over the past year, the Missoula metropolitan area saw the median sales prices across all housing types fall while inventory has gown – a sign that the local housing market has begun to stabilize after years of soaring prices and low inventory.
The Missoula Organization of Realtors this week unveiled its latest housing report, which affirms the market's slow correction. In 2024, the sales price across all unit types stood at $562,400 and saw 984 sales. In 2025, however, the median price fell to $550,000, marking a 2.2% decrease in the median price.
Mandy Snook with Montana Homes and Land Co. said the pace and volume of sales are gaining momentum while median prices are undergoing “a modest adjustment.”
“In 2024, we had an increase in the number of closed sales – the first time we've seen that since 2020,” she said. “That increase continued into 2025, and we closed the year with 1,029 units sold – an increase of 4.6%.”
When broken down by unit type, single-family homes closed the year at a median price of $584,00o while townhouses averaged $497,000. Condos averaged $343,000 while manufactured homes on owned land averaged $356,000.
“In 2024, we said our theme was the stabilization of the market, and that theme carried into 2025,” said Snook. “We saw a couple of years of quickly rising prices during the pandemic and reduced sales volume. A period of stabilization is typical as markets return to balance.”
The local housing market has been buoyed by a number of factors, including an increase in inventory and falling interest rates. Over the last year, more homes sold when priced below $600,000. When listed over that price, sales begin to diminish.
Sales activity in various neighborhoods drives to that point, said Matt Gehr with Prime Lending. The Lewis and Clark neighborhood, where the median price of a home is roughly $550,000, the number of sales increased while the inventory of for-sale homes remains scant.
The same is true in the Southgate and Fraklin to the Fort neighborhoods, where the median sales price was $530,000 and $434,000 respectively. The Sxwtpqyen neighborhood has delivered the most sales while prices there have fallen to a median $520,000.
“The Sxwtpqyen area continues to be a neighborhood carrying the most sales in the Missoula urban area,” said Snook. “More homes are selling and they're concentrated at more attainable price points. The shift where buyers are active is what influences the median.”
A shift toward affordability?
The increase in homes at a price considered affordable when compared to wages has also moved the "affordability index." The index represents a comparison between wages and the monthly cost of a home. The federal government considers 30% of one's income going to housing as affordable while a score of 100 on the index represents a perfect mark.
In the Missoula urban area in 2025, the index for those with 5% down scored a 65, suggesting that a lack of affordability still lingers in the market for some buyers. But when the down payment increases to 20%, the index rises to 82.
It's the strongest score in years and reflects an increase of attainable housing, said Matt Gehr with Prime Lending.
“What we're seeing as we transition from 2023 to 2025 is a gradual, steady improvement to the affordability index,” he said. “We haven't yet reached a point of balance of affordability, but we're closer to that than we were previously.”
Gehr said a number of factors have contributed to the positive shift in housing, including reduced property taxes and falling interest rates. In 2024, the national average for a 30-year fixed mortgage was sitting at 7.7%. By the close of 2025, it had dropped to 6.3% and has continued its downward trend.
“We've seen a relative stability of interest rates that is unprecedented since before Covid,” he said. “People kind of know what rate they're going to get going in. We're not seeing these huge swings up and down, week to week and day to day.”
The local housing market also has shifted toward a balanced supply, where six months of inventory is considered healthy. The average supply of housing across the Missoula market now stands are roughly five months – a figure not seen since before the pandemic.
But the supply varies by neighborhoods and remains low in those neighborhoods where median home prices are less than $600,000.
“There's two ways a market can really fix supply and level out median sales prices,” said Brint Wahlberg with Windermere Real Estate. “One of those ways is by building housing. In areas where we see more building activity happening, it's no surprise that we see supply go up, median sales prices go down and volume stay strong.”