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When assessing home price momentum, it’s important to monitor active listings and months of supply. If active listings start to increase rapidly as homes remain on the market for longer periods, it may indicate potential future pricing weakness. Conversely, a rapid decline in active listings could suggest a market that is heating up.
Generally speaking, housing markets where active inventory has returned to pre-pandemic levels have experienced weaker home price growth over the past 24 months. Conversely, housing markets where active inventory remains far below pre-pandemic levels have, generally speaking, experienced larger home price increases over the past 24 months.
We are starting to see the number of national active listings rise (up 36.7% from June 2023 to June 2024); however, we’re still well below pre-pandemic levels (down 31.1% below June 2019).
Here’s how June inventory/active listings compare to previous years, according to Realtor.com:
June 2017: 1,292,371
June 2018: 1,216,504
June 2019: 1,219,807
June 2020: 871,557 (overheating during the pandemic housing boom)
June 2021: 492,425 (overheating during the pandemic housing boom)
June 2022: 573,650 (mortgage rate shock starts)
June 2023: 614,326
June 2024: 839,992
If housing inventory maintains the current year-over-year pace of inventory growth (+225,666 homes for sale), we’d have . . .
1,065,658 active inventory in June 2025
1,291,324 active inventory in June 2026
Click here to view an interactive version of the map below.
The biggest inventory: Florida.
The biggest inventory increase in the state is concentrated in sections of Southwest Florida—in particular, in markets like Cape Coral and Fort Myers, which were hard-hit by Hurricane Ian in September 2022. This combination of increased housing supply for sale (the damaged homes) coupled with strained demand—the result of spiked home prices, spiked mortgage rates, higher insurance premiums, and higher HOAs—has translated into market softening across much of Southwest Florida. In addition, the state’s coastal condo market is dealing with the aftereffect of regulation passed following the Surfside condo collapse in 2021.
Click here to view an interactive version of the map below.
At the end of June, three states had returned to the pre-pandemic inventory levels of 2019: Texas (which first did so in May), Florida, and Idaho. Not too far behind are Tennessee, Colorado, Washington, and Arizona.
Why are Sun Belt and Mountain West markets seeing a faster return to pre-pandemic inventory levels than many Midwest and Northeast markets?
Unlike many Sun Belt housing markets, Northeast and Midwest markets have lower levels of homebuilding. As new supply becomes available in Southwest and Southeast markets, and builders use affordability adjustments like mortgage rate buydowns to move it, it has created a cooling effect in the resale market. The Northeast and Midwest don’t have that same level of new supply, so resale/existing homes remain the only game in town.
Big picture: We’re observing a softening across many housing markets as higher mortgage rates temper the fervor that was unsustainably hot during the pandemic housing boom. While home prices are falling in some areas around the Gulf, most regional housing markets are still seeing positive home price growth. The big question going forward is if active inventory and months of supply continue to rise, will more housing markets see outright price declines?