Housing market sees 30% increase in active inventory, yet still 35% below pre-pandemic

For today’s article, we’re looking at the latest national inventory data from Realtor.com.

This weekend, ResiClub PRO members will receive an article showcasing inventory trends down to the local level. It will include several interactive maps and charts, covering over 800 metros and 3,000 counties.

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.

Given the absence of an excessive amount of existing inventory on the market, it makes sense that spiked mortgage rates and strained affordability haven't resulted in more regional home price corrections.

We are starting to see national active listings rise (+30% between April 2023 and April 2024); however, we’re still well below pre-pandemic levels (-35% below April 2019).*

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

April 2017: 1,198,424 📉 

April 2018: 1,102,064 📉 

April 2019: 1,137,198 📈 

April 2020: 941,733 📉 

April 2021: 435,663 📉 

April 2022: 379,978 📉 

April 2023: 562,966 📈 

April 2024: 734,318 📈

Click here to view an interactive version of the map below

Regionally speaking, the year-over-year state shift varies a lot.

In Nevada, active listings are down -12% on a year-over-year basis as markets like Reno and Las Vegas tightened up following a brief home price correction in the second half of 2022.

Meanwhile, active listings are up +64% in Florida on a year-over-year basis.

The bulk of the Florida inventory increase is really 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. Hurricane Ian left behind thousands of damaged homes, and the subsequent need for renovations has resulted in a surge in available inventory. According to the National Oceanic and Atmospheric Administration, Hurricane Ian caused an estimated $112.9 billion worth of total damage, making Ian the third-costliest U.S. hurricane on record.

In addition to residential property damage, the hurricane has also coincided with spiked home insurance costs. 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.

Click here to view an interactive version of the map below

But… most of the country still remains below pre-pandemic inventory/months of supply. Much of the Midwest/Northeast, in particular, remains very tight.

Big picture: We're observing some softening in many housing markets as higher mortgage rates temper the fervor of a market that was unsustainably hot during the Pandemic Housing Boom; however, home prices in most housing markets are still rising.

* 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.