Housing market shift: 21 major markets moving toward buyers

2 hours ago7 min read1 comments

A significant rebalancing of power is underway across the U. S.housing landscape, with a growing number of major metropolitan areas tilting decisively toward buyers after years of seller dominance. This shift is fundamentally tied to the critical metric of housing inventory, which has now returned to—or even surpassed—pre-pandemic 2019 levels in 21 of the nation's 50 largest metro areas, a stark increase from just 13 markets last year.The underlying economic principle is straightforward yet powerful: markets where the supply of active listings has normalized, such as Memphis, Austin, Phoenix, and Denver, have generally witnessed weaker home price appreciation, or even outright declines, over the past 36 months. Conversely, regions where inventory remains severely constrained, predominantly in the Northeast and Midwest, continue to see resilient price growth, preserving the seller's upper hand.This divergence creates a tale of two housing economies. The softening markets are largely concentrated in the Southeast, Southwest, and Mountain West, regions that were the darlings of the pandemic-era boom, attracting a flood of domestic migration that propelled prices to levels often disconnected from local income fundamentals.As D. R.Horton COO Michael Murray noted on an earnings call, specific Florida markets like Jacksonville are grappling with 'excess inventory,' a situation that forces builders to adjust. The catalyst for this correction was the dual shock of slowing migration and spiking mortgage rates, which left frothy markets like Austin and Punta Gorda, Florida, reliant on local buyers who could no longer sustain the inflated prices.This adjustment has been accelerated by a pipeline of new construction across the Sun Belt, where builders, acting as a market stabilizer, are quick to deploy price cuts and incentives to maintain sales velocity. This builder activity creates a cooling ripple effect throughout the entire resale market, as budget-conscious buyers pivot to new builds where deals are more readily available, thereby increasing competitive pressure on existing homeowners.In contrast, the Northeast and Midwest, which were less dependent on the transient pandemic migration surge and have a slower pace of new construction, have avoided this inventory glut. With less exposure to the demand shock and fewer builders offering large concessions, the supply-demand imbalance persists, keeping the leverage firmly with sellers.For investors and market watchers, this inventory data serves as a leading indicator, much like a key economic report from the Fed. It suggests a continued period of price moderation and increased negotiating power for buyers in these 21 markets, while the persistent scarcity in other regions points to sustained upward pressure on home values, painting a complex and fragmented picture of the American dream of homeownership.

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#housing market

#inventory

#homebuyers

#price growth

#pandemic boomtowns

#Sun Belt

#new construction