Analysts at LendingOne looked over the latest inventory data to better understand what could await real estate investors over the coming year.
LendingOne’s top-line findings:
- Inventory for sale on a national level is still limited, which sets a floor on prices and keeps existing investor portfolios at high levels.
- In early 2024, active listings levels are rising faster than in previous years, indicating that there are more opportunities out there for savvy investors.
- Active listings remain tightest across markets in the Northeast and Midwest markets, while there’s greater softening happening in parts of Texas and Florida.
In May 2024, there were 787,722 active listings on Realtor.com, showing a 64% increase from May 2022 levels (479,462 listings) and up 35% from May 2023 582,441 listings).
However, active listings in May 2024 were still 33% lower than the pre-pandemic levels of May 2019 (1,180,920 listings). That lack of active listings is a core reason that strained affordability and spiked mortgage rates haven’t translated into a greater pullback in home prices.
While active listings on a national basis remain well below pre-pandemic levels, some pockets of the country, including San Antonio and Austin, have bounced back above pre-pandemic inventory levels.
Among the 100 largest metros
5 metros where active listings in May 2024 were up the most since May 2019:
Lakeland, FL: +43%
Austin-Round, TX: +35%
Colorado Springs, CO: +30%
San Antonio, TX: +20%
McAllen, TX: +17%
5 metros where active listings in May 2024 were down the most since May 2019:
Hartford, CT: -79%
Bridgeport, CT: -79%
New Haven, CT: -73%
Albany, NY: -71%
Allentown, PA: -69%
For now, at least, the markets that have returned to pre-pandemic levels remain in the minority.
How does LendingOne interpret active listing data?
If inventory begins to rise quickly, in theory, it signals a softening market. If inventory begins to fall quickly, in theory, it signals a strengthening housing market.
U.S. housing markets where inventory has returned to pre-pandemic levels, like Austin, have experienced softer home price growth over the past two years. Conversely, housing markets where inventory remains far below pre-pandemic levels have, generally speaking, experienced stronger home price growth over the past two years.
Big picture: While national inventory is still rising a bit as mortgage rates remain elevated, it still remains well below pre-pandemic levels. That suggests that in the short term, home prices in a lot of markets could hold firm or even go higher.