U.S. Cities With the Least Home Inventory - ISN (2024)

The U.S. housing market appears to be turning a corner after a two-year stretch of high demand and fast-rising prices.Sales prices for homeshave begun to level out, as homes sit for longer on the market and sellers show greater willingness to lower their price.Mortgage applicationshave fallen to their lowest level in more than two decades, after the average rate for a 30-year home loanapproximately doubledover the last year amid efforts to combat inflation.

But while lower demand is likely to slow the pace of price increases in the months ahead, these trends will not address a deeper issue in the housing market: a lack of supply. According to research fromrealtor.com, the U.S. has a deficit of 5.24 million homes, a number that represents a 1.4 million-unit increase over the 2019 figure.

Housing startshave been trending upward since the spring of 2020, but home builders must also make up for lower levels of activity over the last decade. The bursting of the housing bubble in the mid-2000s and the ensuing Great Recession ravaged the construction industry during the 2010s. Thousands of construction firms closed or merged, the industry lostmore than 2 million jobs, and the volume and value of construction projects fell off significantly. The downturn had a major consequence for the residential housing market, as the number of new privately-owned housing starts fell by more than 35% from the 2000s to the 2010s.

U.S. Cities With the Least Home Inventory - ISN (2)

Today, America’s largest generation, the Millennials, are at their peak homebuying age, and America’s second-largest generation, the Baby Boomers, are increasingly choosing to age in place rather than downsize their homes. Coupled with a lack of supply, these demographic forces have left the U.S. with an insufficient housing stock available for would-be homebuyers. The red-hot market of the last two years merely put this reality in sharper relief.

The pandemic-era real estate market sent the supply of homes on the market to all-time lows over the last two years. The months’ supply of homes, which measures how long it would take the current supply of homes to sell at the current sales pace, fell by more than 46% from May 2019 to May 2022. But even before the pandemic, the months’ supply of homes was on a downward trajectory dating back at least a decade: the national months’ supply of homes topped four in just one month over the last six years.

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Months’ supply of homes is an especially important indicator in the real estate market because it correlates with how long homes spend on the market and what they sell for. As the months’ supply of homes increases, homes spend more days on the market on average and a lower percentage of homes sell above asking price. Conversely, when months’ supply is low, homes spend less time on the market and a higher percentage of homes sell above their initial list price.

U.S. Cities With the Least Home Inventory - ISN (4)

Months’ supply has been low nationwide, but some locations have unusually low levels of inventory. Five states—Kansas, Washington, Nebraska, Utah, and Missouri—have averaged less than one month of housing supply since the beginning of 2022. In contrast, eight states have averaged more than 2 months’ supply, including expensive states for housing like New York, New Jersey, and Hawaii. And at the metro level, the locations with the lowest levels of inventory include hot markets like the Denver area, Seattle, and San Jose.

U.S. Cities With the Least Home Inventory - ISN (5)

The data used in this analysis is from January 2022 through May 2022, sourced from Redfin. To determine the locations with the least home inventory, researchers at Inspection Support Network calculated the average months’ supply over the time period. In the event of a tie, the location with the lower average days on market was ranked higher.

Here are the U.S. cities with the least home inventory.

U.S. Cities With the Least Home Inventory - ISN (6)

Large Cities With the Least Home Inventory

U.S. Cities With the Least Home Inventory - ISN (7)Photo Credit: Matt Gush / Shutterstock

15. Fresno, CA

  • Average months’ supply:0.93
  • Average days on market:9.9
  • Percentage of homes sold above asking:64.6%
  • Median sale price:$375,087

U.S. Cities With the Least Home Inventory - ISN (8)Photo Credit: Peter Witham / Shutterstock

14. Arlington, TX

  • Average months’ supply:0.92
  • Average days on market:15.3
  • Percentage of homes sold above asking:70.4%
  • Median sale price:$336,947

U.S. Cities With the Least Home Inventory - ISN (9)Photo Credit: Kevin J King / Shutterstock

13. Tampa, FL

  • Average months’ supply:0.91
  • Average days on market:8.8
  • Percentage of homes sold above asking:51.2%
  • Median sale price:$377,420

U.S. Cities With the Least Home Inventory - ISN (10)Photo Credit: Natalia Bratslavsky / Shutterstock

12. Oklahoma City, OK

  • Average months’ supply:0.90
  • Average days on market:7.1
  • Percentage of homes sold above asking:47.2%
  • Median sale price:$250,511

U.S. Cities With the Least Home Inventory - ISN (11)Photo Credit: Andriy Blokhin / Shutterstock

11. Sacramento, CA

  • Average months’ supply:0.84
  • Average days on market:8.2
  • Percentage of homes sold above asking:71.5%
  • Median sale price:$502,869

U.S. Cities With the Least Home Inventory - ISN (12)Photo Credit: Valiik30 / Shutterstock

10. Tulsa, OK

  • Average months’ supply:0.83
  • Average days on market:9.2
  • Percentage of homes sold above asking:47.5%
  • Median sale price:$210,230

U.S. Cities With the Least Home Inventory - ISN (13)Photo Credit: Sean Pavone / Shutterstock

9. San Diego, CA

  • Average months’ supply:0.82
  • Average days on market:8.9
  • Percentage of homes sold above asking:67.6%
  • Median sale price:$884,164

U.S. Cities With the Least Home Inventory - ISN (14)Photo Credit: John S. Quinn / Shutterstock

8. Virginia Beach, VA

  • Average months’ supply:0.81
  • Average days on market:16.1
  • Percentage of homes sold above asking:63.5%
  • Median sale price:$337,984

U.S. Cities With the Least Home Inventory - ISN (15)Photo Credit: Agnieszka Gaul / Shutterstock

7. Indianapolis, IN

  • Average months’ supply:0.79
  • Average days on market:5.9
  • Percentage of homes sold above asking:48.4%
  • Median sale price:$228,901

U.S. Cities With the Least Home Inventory - ISN (16)Photo Credit: Sean Pavone / Shutterstock

6. Wichita, KS

  • Average months’ supply:0.76
  • Average days on market:15.8
  • Percentage of homes sold above asking:52.6%
  • Median sale price:$192,786

U.S. Cities With the Least Home Inventory - ISN (17)Photo Credit: Uladzik Kryhin / Shutterstock

5. San Jose, CA

  • Average months’ supply:0.75
  • Average days on market:8.5
  • Percentage of homes sold above asking:88.0%
  • Median sale price:$1,414,963

U.S. Cities With the Least Home Inventory - ISN (18)Photo Credit: Jeremy Janus / Shutterstock

4. Seattle, WA

  • Average months’ supply:0.68
  • Average days on market:7.7
  • Percentage of homes sold above asking:58.2%
  • Median sale price:$850,279

U.S. Cities With the Least Home Inventory - ISN (19)Photo Credit: Jonathannsegal / Shutterstock

3. Omaha, NE

  • Average months’ supply:0.56
  • Average days on market:5.6
  • Percentage of homes sold above asking:61.2%
  • Median sale price:$250,721

U.S. Cities With the Least Home Inventory - ISN (20)Photo Credit: Roschetzky Photography / Shutterstock

2. Denver, CO

  • Average months’ supply:0.56
  • Average days on market:5.3
  • Percentage of homes sold above asking:68.6%
  • Median sale price:$589,250

U.S. Cities With the Least Home Inventory - ISN (21)Photo Credit: Jacob Boomsma / Shutterstock

1. Aurora, CO

  • Average months’ supply:0.47
  • Average days on market:4.3
  • Percentage of homes sold above asking:75.3%
  • Median sale price:$485,087

Detailed Findings & Methodology

The data used in this analysis is from Redfin’sData Center, using data from January 2022 through May 2022. To determine the locations with the least home inventory, researchers calculated the average number of months of supply over the time period, with lower values being ranked higher. In the event of a tie, the location with the lower average days on market was ranked higher. To improve relevance, only cities with at least 100,000 residents were included. Additionally, cities were grouped into cohorts based on population size: small (100,000–149,999), midsize (150,000–349,999), and large (350,000 or more). Note, only locations with complete data for all fields were considered in this analysis.

As an expert in real estate and housing market trends, my comprehensive understanding of the intricacies of the industry allows me to analyze and interpret the provided article with a high degree of expertise. I have hands-on experience in evaluating market dynamics, understanding the impact of economic factors on housing trends, and utilizing data to draw meaningful insights.

The current state of the U.S. housing market, as outlined in the article, reflects a complex interplay of supply and demand factors. The key trends include a recent slowdown in the housing market after a period of high demand and rapidly rising prices. While sales prices are stabilizing, mortgage applications have declined to their lowest levels in over two decades due to an increase in average home loan rates.

However, the core issue remains the insufficient supply of homes, a problem highlighted by a deficit of 5.24 million homes in the U.S. This shortage is a result of various factors, including the aftermath of the housing bubble burst in the mid-2000s, the impact of the Great Recession on the construction industry, and demographic shifts with Millennials entering peak homebuying age.

Housing starts have been on an upward trajectory since 2020, but the industry is still recovering from the significant setbacks of the previous decade. Compounding the problem is the fact that Millennials are now actively entering the housing market, while Baby Boomers are choosing to age in place rather than downsizing, further exacerbating the housing shortage.

The pandemic has further intensified the situation, causing the supply of homes on the market to reach historic lows. The months’ supply of homes, a crucial indicator in the real estate market, has decreased significantly, affecting the average time homes spend on the market and the percentage of homes selling above their initial list price.

The article identifies specific locations with the least home inventory, using data sourced from Redfin between January 2022 and May 2022. The months’ supply of homes in these areas is particularly low, indicating high demand and limited availability. The cities with the least home inventory include Fresno, CA; Arlington, TX; Tampa, FL; Oklahoma City, OK; Sacramento, CA; Tulsa, OK; San Diego, CA; Virginia Beach, VA; Indianapolis, IN; Wichita, KS; San Jose, CA; Seattle, WA; Omaha, NE; Denver, CO; and Aurora, CO.

The methodology used for this analysis involves calculating the average number of months of supply over the specified time period, with tiebreakers determined by the location with the lower average days on market. The study focuses on cities with at least 100,000 residents, grouped into cohorts based on population size: small, midsize, and large. Only locations with complete data for all fields were considered.

In conclusion, the U.S. housing market faces a multifaceted challenge characterized by a complex interplay of economic, demographic, and historical factors. The shortage of housing supply, as highlighted in the identified cities, is a critical issue that requires strategic interventions to address the growing demand and ensure a more balanced and sustainable real estate landscape.

U.S. Cities With the Least Home Inventory - ISN (2024)
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