There are a number of factors contributing to record home price growth in 2022, including homebuilding hurdles, remote work opportunities, and FOMO over rising mortgage rates.
But chief among the inflationary forces in the housing market has been an unprecedented shortage of supply. Housing inventory was at record-lows for much of the year before higher mortgage rates cooled demand and allowed it to start climbing back.
According to data from Realtor.com, active listings increased 26% from April to May, and were up 8% year-over-year. Some of this is due to seasonality, but any increase in inventory is a welcome one for homebuyers. Greater inventory means more choice, less competition, and eventually cooling price growth.
With that said, It’s important to remember that the housing market is not a monolith. Just because active listings are up nationwide does mean they’re up everywhere. In fact, 78 of the 917 metro areas tracked by Realtor.com saw inventory decrease month-to-month, with Spearfish, S.D. seeing a 31% decline in active listings.
So to get a sense of which markets are headed for a cooler future, we identified the 25 metro areas that gained the most inventory from April to May.
As an appetizer, we mapped the top 10 below.
There are three main signs of a cooling market that homebuyers should keep an eye on:
- Inventory increasing
- Days on market increasing
- Prices decreasing
Altogether, 24 US metros saw active listings increase by more than 60% from April to May, and we grandfathered Boise City, Idaho (59%) in to get a round number.
Of those, nine metros saw the median listing price decrease month-over-month, and 10 saw median days on market increase month-over-month, which is another sign of cooling.
|Metro||Change in active listing count (April-May)||Change in median days on market (April-May)||Change in median listing price (April-May)|
|Oak Harbor, WA||100%||-12%||4%|
|Austin-Round Rock, TX||81%||7%||0%|
|The Dalles, OR||80%||11%||2%|
|Idaho Falls, ID||74%||7%||2%|
|Salt Lake City, UT||73%||-7%||2%|
|San Jose-Sunnyvale-Santa Clara, CA||69%||-13%||4%|
|Coeur d’Alene, ID||63%||5%||-11%|
|Boise City, ID||59%||-21%||1%|
What we’re seeing is markets in different stages of cooling. Some metros, like Menomonie, Wisc. and Easton, Md. saw double-digit price growth from April to May. Others, like Marion, Ohio and Levelland, Texas saw prices fall nearly 30%.
Only three metros on the list showed all three signs of cooling from April to May:
- Auburn, Ind.
- Coeur d’Alene, Idaho
- Vernal, Utah
In fact, just 80 out of 917 total metros (8%) showed all three signs of cooling from April to May. The Iron Mountain metro on the Michigan-Wisconsin border is perhaps the coldest market in the country in May with a 13% increase in active listings, 129% increase in days on market, and 46% decrease in median listing price.
The biggest takeaway is that every market is different. The 25 markets above are all experiencing rapid inventory gains, and each is reacting in its own unique way. So while national headlines claim “the market” is headed one way or another, it’s really headed in multiple directions at the same time.
Overall, inventory is increasing in a vast majority of US metros, which is an encouraging sign for homebuyers after a rough couple of months.