When assessing home price momentum, it’s important to monitor active listings and months of supply. If active listings start to rapidly increase, or get very high, 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.
In October 2024, national active inventory for sale was up 29% over October 2023. While that’s still 21% fewer U.S. homes for sale as compared to October 2019, the rise does suggest that, nationally, the market is softening as buyers aren’t purchasing homes as quickly as they were before.
Over the past 12 months, active listings have inched up just about everywhere; however, the biggest inventory jumps over the past year are concentrated across the Sun Belt.
While active housing listings are rising year-over-year in most regional housing markets, most markets are still below pre-pandemic inventory levels. One could argue that this inventory jump is a much-needed shift given just how unhealthy and tight the housing market became during the pandemic housing boom.
Most of the Midwest, Northeast, and Southern California remain below pre-pandemic inventory levels. In contrast, many parts of the Gulf Coast, including Tampa and New Orleans, and the Mountain West have ticked back above pre-pandemic inventory levels.
The “5-year” column in the chart above is the most telling. Among the 50 largest markets, Austin homebuyers have gained the most leverage/power. Over that same period, sellers in Hartford, Connecticut, have retained the most leverage/power.
Generally speaking, housing markets where inventory (i.e., active listings) has returned to pre-pandemic levels have experienced weaker home price growth (or outright declines) over the past 24 months. Conversely, housing markets where inventory remains far below pre-pandemic levels have, generally speaking, experienced stronger home price growth over the past 24 months.
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