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Across the United States, the number of houses available to buy has diminished over the last five years. The decline started when mortgage rates were extremely low and has persisted during this year’s rapid rise in rates.
This is a national phenomenon. During the peak housing market five years ago, July 2017, there were more than 1.7 million total listings nationally. In the same month of 2022, just under 1.2 million homes were up for sale. That’s a decline of 31%.
The U.S. real estate market still has its seasonal cadence. But while inventory has mostly continued to follow the same seasonal trend each year, the peaks in housing inventory have steadily fallen over the last five years.
This change is happening in almost every housing market in the country.
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But all housing markets are local. MarketWatch has analyzed five years of listing data from Realtor.com, a website that aggregates listing data from the Multiple Listing Service platform used by industry practitioners, to track the five-year inventory decline at the county level. We also interviewed realtors, homebuyers and sellers to understand how this change has impacted them.
In March of 2022, El Paso County, Texas.; Wake County, which contains Raleigh, N.C.; and Clark County, Nev., which encompasses Las Vegas, each saw a decline of more than 70% in housing inventory from 2017. They were the three counties with the biggest decline in large counties that MarketWatch surveyed — counties with at least 5,000 total listings in any month in 2017.
Seven months later in October, even with mortgage rates rapidly soaring, housing inventory remained historically low. Counties in the top 10 in October included three counties in Connecticut, plus two commuter counties near Chicago, reflecting the pandemic-era desire of people to move away from cities and opt for more space further away from bustling metros.
A key reason for low inventory is the slowdown in home building that can be traced back to the Great Recession.
According to a November report by Realtor.com, the U.S. is short 5.8 million homes based on household formations and single-family home construction.
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Smaller counties are experiencing the same fate as large ones. Out of the 606 counties classified as “small” by MarketWatch’s analysis, 458 of them experienced a housing inventory decline of more than 20% from five years earlier during the July peak.
See from June 2022: Believe escaping to a small town will revive your dream of homeownership? Those housing markets are not as idyllic as you’d think.
Small housing markets are limited to counties with less than 2,500 total listings in any month of 2017.
In July, MarketWatch reported that homebuyers may start to see some relief with inventory rising year-over-year. However, as fall rolled around, homebuyers were still confronting a housing shortage.
See our list of mid-sized housing market rankings below.
Mid-sized housing markets are limited to counties with at least 2,500 and less than 5,000 total listings in any month of 2017.
