Active inventory for sale across much of the Northeast, Midwest, and Southern California remains well below 2019 pre-pandemic levels, while active inventory in pockets of the Sun Belt—particularly in states like Texas and Florida—has jumped.
One factor driving the bifurcation is that some pockets of the Sun Belt and Mountain West experienced even greater home price growth during the pandemic housing boom, which stretched fundamentals too far beyond local incomes.
Unlike many Sun Belt housing markets, many Northeast and Midwest markets have lower levels of homebuilding. As new supply becomes available in Southwest and Southeast markets, the resale market experiences an additional cooling effect.
As builders use affordability adjustments like mortgage rate buydowns to move new supply in the Southwest and Southeast, the upfront costs remain a barrier, making resale homes more attractive.
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