As we step into the heart of 2024, the American real estate landscape is witnessing a significant shift. Last year, prospective homebuyers were caught in a challenging market, juggling high mortgage rates and a scarce selection of homes for sale. This scarcity was largely due to a “lock-in” effect, where high mortgage rates dissuaded homeowners from selling their properties to avoid relinquishing their favorable mortgage rates. The result? A market with limited choices for buyers.

Introduction

However, this trend is showing signs of reversal. A recent report from Realtor.com® indicates a promising increase in home inventory. December saw a 4.9% rise in homes for sale compared to the previous year, with new sellers entering the market at a remarkable 9.1% higher rate year-over-year.

This increase, while nationwide, varies across different cities, states, and regions. Some areas have experienced more significant growth than others, reflecting the dynamic nature of the real estate market. This article delves into these variations, highlighting regions where the inventory has increased the most.

“In a historical context, the inventory level may not still be that favorable,” points out Realtor.com senior economic analyst Hannah Jones. “But it’s a lot better than it was during the pandemic.”

Mortgage interest rates are speculated to continue their downward trajectory, potentially inviting more homes and buyers into the market. Despite this positive trend, it’s important to note that the current inventory levels still lag behind the pre-pandemic years of 2017-2019.

Inventory Rising

Hannah Jones, a senior economic analyst at Realtor.com, acknowledges that while the inventory levels may not be at their historical best, they have improved considerably since the pandemic’s peak.

Our analysis focuses on the year-over-year active listing data from December 2023 across the 150 largest metropolitan areas in the country. We have identified the top ten metros with the most significant inventory increases, ensuring geographic diversity by selecting only one metro per state.

From the South to the Northeast

In the South, a region known for its lower-than-average prices and attractive living conditions, the inventory saw an impressive 7.7% year-over-year increase in December 2023. Florida led this surge with a nearly 27% rise in active listings. Following close behind were Louisiana and Mississippi.

Despite the South’s robust growth, other regions like the Northeast experienced a decline in home inventory, dropping by 8% annually in December. Factors such as high demand and limited land availability for new constructions contributed to this drop. The West, on the other hand, is stabilizing after a significant inventory surge in late 2022, with a 14.8% decrease in home listings in December 2023. The Midwest shows a more moderate market adjustment, with a slight 0.2% increase in inventory.

Among the cities with the most significant inventory jumps, Cape Coral, FL, and Eugene, OR, stand out with 99.3% and 46.7% increases in year-over-year inventory, respectively. Other notable mentions include Fayetteville, NC, Gulfport, MS, and Corpus Christi, TX.