80 US Metros Now Have Pre-Pandemic Inventory Levels

Housing inventory nationwide is still 11% below levels recorded in 2019 prior to the pandemic housing boom, but is improving. Since January, the number of U.S. metros with active inventory back above 2019 levels has grown, according to the ResiClub blog.

That month, just 41 of the 200 largest U.S. metro areas saw inventory return to pre-pandemic levels, but that figure has increased each month through July. In August, inventory in 80 of the 200 largest metros were are pre-pandemic levels, the same number as the previous month.

A majority of the markets with housing inventory now above pre-pandemic levels can be found in Sun Belt states, such as Florida, Texas, Arizona, and Colorado.

Many of the softest housing markets, where homebuyers have gained leverage, are located in Gulf Coast and Mountain West regions. Some of these areas were among the nation’s top pandemic boomtowns, having experienced significant home price growth during the pandemic housing boom, which stretched housing fundamentals far beyond local income levels.

When pandemic-fueled domestic migration slowed and mortgage rates spiked, markets like Cape Coral, Florida, and San Antonio, Texas, faced challenges as they had to rely on local incomes to sustain frothy home prices. The housing market softening in these areas was further accelerated by the abundance of new home supply in the pipeline across the Sun Belt. Builders in these regions are often willing to reduce net effective prices or make other affordability adjustments to maintain sales. These adjustments in the new construction market also create a cooling effect on the resale market, as some buyers who might have opted for an existing home shift their focus to new homes where deals are still available.

In contrast, many Northeast and Midwest markets were less reliant on pandemic migration and have less new home construction in progress. With lower exposure to that demand shock, active inventory in these Midwest and Northeast regions has remained relatively tight, keeping the advantage in the hands of home sellers.