Vacancy rates within Missoula's multifamily housing market ticked up by 0.61% while the average rent increased 7.4%, according to the latest housing snapshot released by Sterling CRE in Missoula.
Added up, the new figures suggest that demand remains strong across the local market.
“Missoula's multifamily market is showing strength across most unit types, supported by an active development pipeline that will shape supply economics in the coming months,” the report states.
Among the various housing options, 3-bedroom and 2-bath units accounted for the majority of the new units, followed by 2-bedroom and 2-bath units.
Sterling passed it off as a new “higher-end supply.”
“Developers had long prioritized 1-bed and 2-bed units for cost efficiency,” Sterling stated. “But this quarter, Liberty Estates began leasing its townhome-style 3-bed units that include garages. This set a new pricing benchmark, driving up the average.”
The vacancy rate across Missoula's multifamily market was less than 1% several years ago. That has since climbed to roughly 4.7%, which is approaching what housing experts consider to be closer to a healthy figure.
According to Sterling, 508 multifamily units were in the planning phase during the second quarter of 2025. Around 250 had been permitted, 443 were under construction and 138 had been delivered.
Still, the housing market continues to face headwinds, including challenges in securing financing.
“Higher interest rates and construction costs have chilled speculative plans,” Sterling noted. “This weak expansion in early-stage pipeline is a yellow flag for supply sustainability beyond 2026.”
