Nick and Melissa planning for the future

You’ve heard it, I’ve heard it and it seems like everyone from your barista to the mayor is talking about it. Missoula is in the middle of a housing affordability crisis.

While we braced for the market to tighten even more as we realized that the COVID-19 pandemic was not going to end with the first lock down of 2020, I don’t believe anyone was predicting the way in which the crisis would evolve into an emergency and severely affect the homebuying market for many in Missoula.

The warning bells had started to sound near the end of 2019 when the year over year growth for median home price had risen 8.6%, the largest increase at that time in over a decade. It wasn’t until mid-2020 that the full impact of the pandemic economy would start to emerge. Today, Missoula County has seen homes values up over 32%, rental vacancy rates are down to 0.38% and average rent in Missoula in early 2019 was $862 — it is now $1,111.

As Homeword’s Homebuyer Educator, I started hearing through the grapevine about many multiple offer situations, cash buyers, sight unseen purchases and bidding wars. I knew we were heading into new territory for many would-be Missoula buyers. At the same time, we had the compounding forces of record-low interest rates and, for some, an infusion of cash while they maintained employment. Nationally, saving rates jumped and, for many, it was the right time to start looking.

Only to be disappointed.

I remember the first couple to call me telling me they had just had their seventh offer rejected for another offer that was over asking price or cash. My heart broke for them. As often as we tell ourselves buying a house is a financial transaction, at the heart of it you are preparing yourself each time you make an offer to make this house your home. It was the first of many conversations to come about endurance in the journey to homeownership. As they waited for the right home to come up, I suggested they invest their time in learning more about their personal finances with our Financial Skill Building course. It allowed them to identify additional financial goals and start planning for life after they bought their home. Their ninth offer was accepted, and they successfully purchased their first home. As we celebrated this milestone together, I found myself with a mixture of emotions. I was so happy for them, they had found just the right home, but I knew that for many Missoulians the road to homeownership would include similarly daunting odds.

In the last 18 months I have ridden the ups and downs with many of our community members as they navigate this market. One bright spot is that the tried-and-true steps to prepare for the homeownership journey remain the same now as they did five or even 10 years ago. Our most successful graduates are preparing by building and maintaining good credit, stabilizing income and spending, learning more about down payment assistance programs and educating themselves about the market so they can spot good opportunities and be persistent in pursuing them. It may take more time than it did a few years ago, but homebuyers are still finding success.

Homeword is an essential partner in helping our community members understand and make effective choices in their financial and homeownership worlds. We help combat the feeling that Missoulians have no options when market factors outside of their control change quickly. By taking steps to learn more about the homebuying process our Get Ready for HomeOwnership graduates make steady progress towards a variety of financial goals that strengthen their financial foundation and lead to future successful home purchases. I see people work hard and find success meeting goals every day, even during these challenging times, and I am excited to continue to be part of the first steps in getting there.

Julie Pavlish is Homeword’s Homebuyer Educator

Learn more about our homebuyer education program.