Editor’s Note: This story originally appeared on Construction Coverage.
The COVID-19 pandemic brought dramatic changes to the U.S. housing market. At the onset of the pandemic, housing sales and new construction initially stalled due to economic uncertainty. But as the U.S. entered survival mode and the federal funds rate was lowered drastically, home buying and building resumed.
The popularization and widespread acceptance of remote work not only incentivized Americans to prioritize their space (and home offices), but allowed individuals to seek housing outside of their typical boundaries, increasing demand and contributing to inflated house prices.
While high mortgage rates are a significant barrier for potential home buyers, they do their part to increase housing inventory. The low interest rates and high demand environment of 2020 and 2021 contributed to the significant decline of housing inventory between January 2020 and December 2021, which dropped from nearly 1.3 million to just over 650,000 homes, according to data from Redfin.
This aligns with a larger trend over the past two decades: from May 2012 to January 2022, U.S. housing inventory dropped from 2,194,184 available homes to 629,904 — a net decrease of over 1.5 million.
However, with rising mortgage rates and an increase in home construction during COVID, U.S. housing inventory is finally showing signs of growth after years of steady decline. From January 2022 to October 2022, U.S. housing inventory increased from 629,904 to 1,173,927 available homes.
While housing inventory is still below pre-pandemic levels (in March 2020, housing inventory stood at 1,365,211), this recent growth is promising for future homebuyers seeking lower asking prices.
To determine the locations with the biggest increases in housing inventory, researchers at Construction Coverage analyzed the latest data from Redfin’s Data Center.
Here are the U.S. cities with the biggest annual increase in housing inventory.
15. San Diego, CA
- Percentage change in housing inventory: +29.1%
- Total change in housing inventory: +418
- Months’ supply (Q3 2022): 2.0
- Months’ supply (Q3 2021): 0.9
14. San Jose, CA
- Percentage change in housing inventory: +31.1%
- Total change in housing inventory: +228
- Months’ supply (Q3 2022): 1.8
- Months’ supply (Q3 2021): 0.9
13. Denver, CO
- Percentage change in housing inventory: +32.3%
- Total change in housing inventory: +422
- Months’ supply (Q3 2022): 1.6
- Months’ supply (Q3 2021): 0.9
12. Oklahoma City, OK
- Percentage change in housing inventory: +39.6%
- Total change in housing inventory: +511
- Months’ supply (Q3 2022): 1.7
- Months’ supply (Q3 2021): 1.1
11. Sacramento, CA
- Percentage change in housing inventory: +41.8%
- Total change in housing inventory: +367
- Months’ supply (Q3 2022): 2.0
- Months’ supply (Q3 2021): 1.0
10. Detroit, MI
- Percentage change in housing inventory: +43.0%
- Total change in housing inventory: +727
- Months’ supply (Q3 2022): 5.9
- Months’ supply (Q3 2021): 4.2
9. Fort Worth, TX
- Percentage change in housing inventory: +47.6%
- Total change in housing inventory: +802
- Months’ supply (Q3 2022): 2.3
- Months’ supply (Q3 2021): 1.3
8. Fresno, CA
- Percentage change in housing inventory: +48.9%
- Total change in housing inventory: +258
- Months’ supply (Q3 2022): 1.9
- Months’ supply (Q3 2021): 1.0
7. Bakersfield, CA
- Percentage change in housing inventory: +49.1%
- Total change in housing inventory: +298
- Months’ supply (Q3 2022): 2.2
- Months’ supply (Q3 2021): 1.2
6. Austin, TX
- Percentage change in housing inventory: +51.7%
- Total change in housing inventory: +1,224
- Months’ supply (Q3 2022): 3.8
- Months’ supply (Q3 2021): 1.7
5. Tampa, FL
- Percentage change in housing inventory: +52.7%
- Total change in housing inventory: +677
- Months’ supply (Q3 2022): 2.6
- Months’ supply (Q3 2021): 1.2
4. Phoenix, AZ
- Percentage change in housing inventory: +65.6%
- Total change in housing inventory: +2,116
- Months’ supply (Q3 2022): 3.3
- Months’ supply (Q3 2021): 1.3
3. Las Vegas, NV
- Percentage change in housing inventory: +72.1%
- Total change in housing inventory: +2,147
- Months’ supply (Q3 2022): 4.3
- Months’ supply (Q3 2021): 1.5
2. Aurora, CO
- Percentage change in housing inventory: +85.0%
- Total change in housing inventory: +429
- Months’ supply (Q3 2022): 1.6
- Months’ supply (Q3 2021): 0.6
1. Mesa, AZ
- Percentage change in housing inventory: +87.9%
- Total change in housing inventory: +810
- Months’ supply (Q3 2022): 3.2
- Months’ supply (Q3 2021): 1.2
Methodology
To determine the locations with the biggest increases in housing inventory, researchers at Construction Coverage analyzed the latest data from Redfin’s Data Center. The researchers ranked cities by biggest increase in average monthly housing inventory between Q3 of 2021 to that same period in 2022. In the event of a tie, the city with the bigger total change in average monthly housing inventory was ranked higher. Researchers also calculated the average months’ supply for the same periods.
To improve relevance, only cities with at least 100,000 people were included in the analysis.