Low inventory continues to plague local housing markets. Even with mortgage rates above 6%, an underlying supply imbalance is impacting residential real estate in cities and towns across America, a MarketWatch analysis shows.
While the overall housing market has cooled nationally, the housing supply gap from slow construction that followed the Great Recession continues to influence a potential homeowner’s ability to buy a home.
The nation’s total housing listings in February reached 945,612, according to Realtor.com, up 13% from February 2022, when listings hit historic lows for the month. But those recent national inventory numbers still remain under the magical 1 million mark going into the spring house-buying season and housing inventory for the entire nation is still down 30% from five years ago.
Because housing markets are best defined at the local level, MarketWatch analyzed data by county to examine which locations have suffered the most significant drops in inventory for February.
Last month, Lake and DuPage counties, just outside Chicago, were the two large-market counties with the biggest decline in total inventory from five years ago—down 62% and 59% respectively. MarketWatch profiled the two Chicago suburbs in December when they also appeared near the top of our analysis of big counties with the lowest availability of housing inventory.
Large markets are defined by MarketWatch as the 54 counties with at least 5,000 listings in any month of 2017. Out of these 54 large markets, 29 have a five-year inventory decline equal to, or above, the national change of -30%.
But the U.S. housing market remains dynamic and there are dramatic regional differences. All housing markets, after all, are local. Two counties where available homes to buy had dropped in a big way early in 2022 have recovered their housing inventory dramatically. A year ago, Wake County, N.C., which includes Raleigh and its suburbs, and Clark County, Nev., encompassing Las Vegas, were among the top three counties in America with the largest declines in total listings from five years prior.
But last month, total listings in Wake County more than tripled from last year to 4,276, even surpassing 2017 levels, the earliest year for which MarketWatch tracks data. So in the last six years, inventory has now increased 4% in Wake County. That improvement extended to North Carolina’s triangle area, with Durham County up 143% from last year and up 44% from five years ago.
In Clark County, Nev., housing inventory in February more than doubled from last year to 7,779 total listings, though that’s still 15% below where inventory was five years ago.
According to MarketWatch’s analysis, El Paso, Texas, was the county with the largest five-year decline in housing inventory for almost every month of last year. The number of homes available to buy in El Paso increased 70% in February 2023 compared to February 2022. Still, El Paso is the county with the third-largest decline in inventory in the last five years, down 58% (sitting behind Lake and DuPage counties.)
Despite recent increases in housing inventory, large counties still struggle to keep up with demand
Gains in housing from one year ago still don’t bring inventory levels close to where they were five years ago
Many small counties also experienced steep housing inventory declines in 2022. Some of them have seen drastic improvements so far this year, but most of them still have depressed inventory levels. At MarketWatch, we define small markets as counties with at least 500 total listings in any month of 2017 and below 2,500 for every month in 2017.
Similar to last year, small counties in the Northeast are still struggling with housing inventory levels. Three counties in Vermont were within the top-four of small counties with the sharpest drop nationwide in housing inventory levels. Three counties in Maine that MarketWatch last year found to be among the top 10 counties with the biggest drops in inventory—Lincoln, Hancock and Franklin—still remain in the the top-10 of total listing declines, but have improved year-over-year.
Homes available for sale in Sawyer County, Wis. are still down 82% from five years ago, even with an 8% increase in total listings from one year ago. Chautauqua County, N.Y., had the second-largest decrease in houses available for sale, according to MarketWatch’s May 2022 analysis, but the county has seen an annual inventory improvement of 60% through February.
Out of the 604 small markets MarketWatch analyzed, over half of the counties sat at or above the five-year decline ending February 2023 of total listings nationally.
Small towns continue to suffer from low supply
While some markets have improved from last year, small markets continue to suffer from low inventory due to persistent housing supply issues
Total inventory for February 2023 for small housing markets
| TOTAL LISTINGS | YEAR-OVER-YEAR | 5-YEAR CHANGE | |
|---|---|---|---|
| Orleans, VT | 64 | −15% | −84% |
| Washington, VT | 65 | −28% | −84% |
| Sawyer, WI | 70 | 8% | −82% |
| Bennington, VT | 102 | −2% | −81% |
| Lincoln, ME | 66 | 2% | −80% |
| Chippewa, MI | 79 | −15% | −80% |
| Anchorage, AK | 195 | −1% | −79% |
| Hancock, ME | 157 | 11% | −78% |
| Franklin, ME | 100 | 2% | −78% |
| Vilas, WI | 108 | −19% | −78% |
Note: Small housing markets are defined as counties with at least 500 total listings in any month and less than 2,500 in all months of 2017.
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