The U.S. housing market has seen dramatic shifts over the past few years, influenced by a combination of pandemic-related dynamics, migration patterns, and rising interest rates. For much of the pandemic, buyers were at the mercy of an ultra-competitive market with limited inventory, pushing home prices to unsustainable levels in many areas. However, as we move into 2024, there’s a noticeable shift occurring in housing markets across the country. In fact, 9 states are now reporting housing inventory levels that surpass pre-pandemic numbers, giving buyers a new edge in markets that were once dominated by sellers.
Housing Market Overview: A Shift in Inventory Levels
For much of the past three years, the housing market has been marked by a severe shortage of homes for sale. This scarcity of listings, combined with low mortgage rates and strong demand, led to soaring home prices. In fact, from December 2019 to December 2020, active listings plummeted by more than half, as the pandemic fueled a housing boom. As a result, many prospective homebuyers found themselves in fierce bidding wars, forced to make quick offers and, at times, pay above asking prices to secure a home.
However, the situation is changing. According to ResiClub’s monthly housing inventory report, housing inventory is on the rise. Nationally, active listings have jumped 22% between December 2023 and December 2024, signaling that buyers are beginning to regain some leverage. While inventory is still 15.7% below pre-pandemic levels, the shift is evident, particularly in states like Florida, Arizona, and Texas.
The Impact of Increased Inventory
So, what does this mean for homebuyers? As inventory rises, the housing market is beginning to feel more like a buyer’s market in certain areas. Buyers now have more options, and they are less likely to face the extreme competition seen in the past couple of years. As homes remain on the market for longer periods, buyers are finding themselves with the ability to negotiate prices and terms, something that was nearly impossible during the peak of the pandemic.
The influx of housing supply is especially significant in Sun Belt and Mountain West markets, which had previously seen the steepest price increases. In places like Southwest Florida, homes are becoming more available due to a combination of factors, including the aftermath of Hurricane Ian in 2022, which led to more properties coming up for sale. This increase in supply, coupled with strained demand due to higher mortgage rates and insurance costs, has contributed to a softening of home prices in many of these regions.
States Experiencing the Biggest Inventory Increases
The following states are showing the most significant jumps in housing inventory levels, now exceeding pre-pandemic figures:
- Florida: Major cities like Jacksonville, Orlando, and many coastal markets are seeing more homes on the market.
- Arizona: Cities such as Phoenix have reported an influx of new listings.
- Colorado: Areas like Colorado Springs are returning to normal inventory levels.
- Texas: Major metropolitan areas are experiencing a balanced market as inventory climbs.
- Utah: Home prices are cooling as more homes become available.
- Washington: Seattle and surrounding areas are witnessing growing inventory, reducing competition.
- Idaho: Boise has seen inventory levels soar, easing the pressure on homebuyers.
- Oklahoma: Oklahoma City and other regions are showing signs of greater availability.
- Tennessee: Nashville’s market is slowly returning to pre-pandemic conditions.
The increased supply in these regions is driving a notable change in the market dynamics, allowing buyers to be more selective and have more time to make decisions.
Table: Inventory Levels (December 2017 – 2024)
| Year | Active Listings (National) | Notes |
|---|---|---|
| December 2017 | 1,127,799 | Pre-pandemic inventory levels |
| December 2018 | 1,185,865 | Slight increase from 2017 levels |
| December 2019 | 1,033,887 | Market beginning to tighten |
| December 2020 | 612,300 | Pandemic housing boom—inventory plummeted |
| December 2021 | 445,303 | Overheating during the pandemic |
| December 2022 | 680,925 | Impact of mortgage rate hikes |
| December 2023 | 714,176 | Early signs of market stabilization |
| December 2024 | 871,509 | Significant increase—buyers gain leverage |
Why Some Markets Are Recovering Faster Than Others
While many of the Sun Belt and Mountain West states are seeing inventory levels that exceed those seen in 2019, other regions are lagging behind. Areas like the Midwest and Northeast have faced slower recovery in inventory, partly because many of these regions have lower levels of homebuilding. The limited supply in these areas means that existing homes remain the primary option for buyers, which keeps prices high and competition fierce.
Moreover, the pandemic housing boom disproportionately affected areas in the Sun Belt and Mountain West, where home prices surged to unsustainable levels due to factors like migration and low-interest rates. As interest rates have risen and pandemic-fueled migration slowed, these markets are now seeing a cooling effect with increased housing supply.
Factors Contributing to the Inventory Shift:
- Pandemic-related migration slowdown: Many buyers moved to these regions during the pandemic, pushing home prices up.
- Rising interest rates: Higher mortgage rates have made homeownership less affordable, easing the pressure on buyers.
- Increased homebuilding: The Sun Belt saw a construction boom, providing more homes for sale.
The Road Ahead for Homebuyers
As inventory continues to rise, it remains to be seen whether more markets will shift to a buyer’s market. The national housing inventory is still below pre-pandemic levels, but the trend in several key states suggests that buyers now have more options than they’ve had in years.
For now, many buyers are in a stronger negotiating position than they were during the pandemic. With more homes to choose from, buyers can afford to be more strategic and patient in their decisions. However, whether this shift in market dynamics continues will depend on a range of factors, including economic conditions, mortgage rates, and the overall health of the housing market.
As we move forward, it’s clear that homebuyers in certain states now have the upper hand—but only time will tell if this trend holds in other regions across the country.
Got a reaction? Share your thoughts in the comments
Enjoyed this article? Subscribe to our free Newsletter for captivating articles, exclusive content, and the latest news.
