10 states are back above pre-pandemic housing inventory levels—these 4 states are likely next

When assessing home price momentum, ResiClub believes it's important to monitor active listings and months of supply. If active listings start to rapidly increase 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, local housing markets where active inventory has returned to pre-pandemic levels have experienced softer home price growth (or outright price declines) over the past 2 years. Conversely, local housing markets where active inventory remains far below pre-pandemic levels have, generally speaking, experienced stronger home price growth over the past 2 years.

National active listings are on the rise (+26.2% between November 2023 and November 2024). This indicates that homebuyers have gained some leverage in many parts of the country over the past year, with some markets even feeling like buyers' markets on the ground.

However, nationally, we’re still below pre-pandemic active inventory levels (-16.6% below November 2019), and some resale markets still remain tight—however, that’s not the case anymore in many pockets of the Sun Belt and Mountain West.

November inventory/active listings* total, according to Realtor.com:

November 2017: 1,228,077 📉

November 2018: 1,273,047  📈

November 2019: 1,143,332 📉

November 2020: 683,822 📉 (overheating during the Pandemic Housing Boom)

November 2021: 512,241 📉 (overheating during the Pandemic Housing Boom)

November 2022: 750,200 📈 (mortgage rate shock)

November 2023: 755,489 📈

November 2024: 953,452 📈

IF we maintain the current year-over-year pace of inventory growth (+197,963 homes for sale), we'd have...

1,151,415 active inventory come November 2025

1,349,378 active inventory come November 2026

Click here to view an interactive version of the map below

Among the biggest inventory jumps: Florida.

In Florida, the biggest inventory increases initially over the past two years were concentrated in sections of Southwest Florida. In particular, in markets like Cape Coral, Punta Gorda, and Fort Myers, which were hard-hit by Hurricane Ian in September 2022. This combination of increased housing supply for sale—the damaged homes coming up for sale—coupled with strained demand—the result of spiked home prices, spiked mortgage rates, higher insurance premiums, and higher HOAs—translated into market softening across much of Southwest Florida.

However, the inventory increases in Florida now expands far beyond SWFL. Markets like Jacksonville and Orlando are also above pre-pandemic levels, as are many coastal pockets along Florida’s Atlantic Ocean side.

One reason being that Florida’s condo market is dealing with the after effects of regulation passed following the Surfside condo collapse in 2021. This is compounded by a slowdown in work-from-home migration to Florida and significant home insurance shocks.

Click here to view an interactive version of the map below

In August 2024, only 4 states had returned to or surpassed pre-pandemic 2019 active inventory levels. In September 2024, it grew to 7 states.

In October 2024, that number grew to 8 states.

In November 2024, that number grew again to 10 states: Arizona, Colorado, Florida, Idaho, Oklahoma, Oregon, Tennessee, Texas, Utah, and Washington.

States likely to join that list soon include Alabama, Nebraska, Hawaii, and Georgia.

Click here to view an interactive of the chart below (best done on desktop)

Why are Sun Belt and Mountain West markets seeing a faster return to pre-pandemic inventory levels than many Midwest and Northeast markets?

One factor is that some pockets of the Sun Belt and Mountain West experienced even greater home price growth during the Pandemic Housing Boom, which stretched fundamentals too far beyond local incomes. Once pandemic-fueled migration slowed, and rates spiked, it became an issue in places like Colorado Springs and Austin.

Unlike many Sun Belt housing markets, many 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 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 are pretty much the only game in town.

Big picture: This year we’ve observed a softening across many housing markets as strained affordability tempers the fervor of a market 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 year-over-year home price growth. The big question going forward is whether active inventory and months of supply will continue to rise and cause more housing markets to see outright price declines?

All the charts above show active listings*, or everything currently for sale. Actives are rising year-over-year because demand has cooled and homes are taking longer to sell—not because there’s a surge in new listings.

In fact, here’s a look at the national chart for new listings**, which remain suppressed due to the lock-in effect that continues to constrain resale turnover. Many homeowners who would otherwise like to sell and buy something else are still opting to stay put to avoid losing their lower mortgage rate/monthly payment.

* Active listings (i.e. what ResiClub often calls “inventory”) = “The count of active listings within the specified geography during the specified month. The active listing count tracks the number of for sale properties on the market, excluding pending listings where a pending status is available. This is a snapshot measure of how many active listings can be expected on any given day of the specified month” according to Realtor.com.

** New listings = “The count of new listings added to the market within the specified geography. The new listing count represents a typical week’s worth of new listings in a given month. The new listing count can be multiplied by the number of weeks in a month to produce a monthly new listing count” according to Realtor.com.

Over the past week, ResiClub PRO members got these 3 additional housing research articles:

These 3 interactive maps show where the resale housing market has weakened—and where it remains tight

What to expect from U.S. home prices in 2025, as predicted by 16 different forecast models

What to expect from mortgage rates in 2025, as predicted by 14 different major research groups

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