While housing prices are beginning to stabilize, we’re still in a seller’s market, with many metro areas continuing to experience high rents and steep mortgage rates. The cause for this situation is complex, with many factors playing a part – but one of if not the most significant contributors to our current situation is the shortage of affordable homes across the U.S.

Since the 2008 recession and housing bubble, our country has failed to produce enough homes to meet the growing demand. In January 2006, the number of new residential housing projects peaked at around 2.2 million units (including single-family homes and multi-family structures.)

But by January 2009, that number dropped to around 490,000. We are still recovering from this housing inventory decline, with 1.3 million housing starts in January of 2023 – a far cry from the pre-recession number, with experts estimating that we are still some 3.6 million homes short

While things are beginning to look up, the impacts of the COVID-19 pandemic are still being felt across the nation. Material shortages, mass layoffs, supply line breakdowns, and abnormal population shifts caused by the pandemic drastically slowed the production of houses. However, some regions were able to counteract this by investing in new home production through incentives and relaxation of zoning laws. As a result, the currently available housing inventory across the country varies significantly by state.

To help homeowners find the regions with the most available homes, we looked at the national housing availability and highlighted which cities are doing well and which ones are not. To calculate housing availability, we considered the 200 largest metro areas in the country and divided the total active listings of each one by the total number of homes sold over the previous month, using January 2023 data from Redfin.

Key Findings

  • Housing availability nationally is just now beginning to rise to pre-pandemic levels, currently sitting at a 3.2-month supply of homes as compared to 2021’s 1.4 months and 2022’s 2.0 months. 
  • Over the past year, housing inventory has increased in 190 of the 200 largest metro areas. 
  • Using current months of housing inventory as a point of reference, only three markets favor buyers.
  • After an influx of home buyers and suppressed inventory in Texas, several metro areas in the Lone Star state are seeing significant upticks in available housing inventory. Waco, Laredo, and San Antonio all rank in the top five places where housing inventory is increasing the most. 
  • Housing inventory increased slightly during the first quarter of 2023, rising by one to 1.5 months on average from December to January.

The National Picture

Nationally, we are still amid a housing shortage that has been growing for decades. Housing production rates have been slowly decreasing each year, with major economic events like the 2008 financial crisis and the COVID-19 pandemic acting as flash points, further slowing down the production of homes.

In 2012, the U.S. had a national stock of over two million homes for sale with a 5.17-month supply of houses. Skip ahead to 2017, and the number of available homes drops to 1.5 million, and our monthly supply is at 3.04. Things then took a nose-dive in the pandemic, the lowest point being in 2021 when our national stock of homes dropped to just over 829,000, with our monthly supply sinking to 0.5. Since then, our total number of available homes has not rebounded much, only rising to 879,000 and our monthly supply jumping to 3.2. While these are notable improvements, they’re still a far cry from our pre-pandemic numbers and even further away from where we were not even a decade ago. 

While overall housing numbers are still low, savvy buyers can still time their house-hunting efforts to maximize their chances of finding a home. Our research showed that housing inventory prices, on a national level, fluctuate with the seasons. Ultimately, inventories are the lowest in the early summer, specifically around the month of May. But, at the end of winter, starting in January, inventory rates spike. You will have a greater selection and more options if you’re able to be flexible with your moving plans and look for a new home at the beginning of the first quarter.

Metro Areas Where Inventory Is Highest and Lowest

The city with the highest housing inventory goes to Waco, Texas, with 11.3 months' worth of homes. Next, we have Miami, Florida, with 8.6 months, then New Orleans, Louisiana, with 8.2 months, followed by Honolulu, Hawaii, with 7.0 months, and Hollywood, Florida, with 6.8 months. Looking at the table below, we can see that Texas and Florida take up the largest sections of the top 10 cities with the highest inventories, possessing three entries apiece. 

For metros with the lowest inventory in the United States, we have Grand Rapids, Michigan, with 0.7 months. Then we have Worchester, Massachusetts, and Omaha, Nebraska, both with 0.9 months, and Fayetteville, North Carolina, and Fort Wayne, Indiana, each with one month of inventory. Unlike the top 10 cities with the highest reserve of homes, this list has no states holding a majority of positions. Furthermore, no region of the U.S. shows up prominently, with metros areas from all over the country being represented.

Where Housing Inventory Is Increasing Most

When looking at the top five cities that have made the most gains, Waco, Texas, is at the top, raising their monthly house supply from 1.1 to 11.3. While Waco's population is small – only about 196,000 – their supply of homes multiplied tenfold from 2022 to 2023. Next in line is Laredo, Texas, with a similarly impressive 5.9-month jump from 0.2 to 6.1 months. Rounding out the list are New Orleans, Louisiana, with a 5.4-month increase, Miami, Florida, with a 5.2-month increase, and San Antonio, Texas, with a 4.8-month increase.

Cities Where Inventory Continues to Decrease

Unfortunately, not all major metro areas are increasing their supply of available homes. The city with the greatest hit to their housing inventory was, by far, Amarillo, Texas. Amarillo went from a 5.8-month supply in 2022 to a 2.8-month supply in 2023, dropping by half. Next, we have Fayetteville, North Carolina, and Cincinnati, Ohio, each with a loss of one month of housing inventory, followed by Louisville, Kentucky, with a loss of 0.8, and Fort Wayne, Indiana, with 0.7. 

At number six, we have Madison, Wisconsin, which saw an inventory decrease from 2 months down to 1.5 months. Following Madison, the seventh, eighth, and ninth spots are a three-way tie between Springfield, Missouri, Milwaukee, Tennessee, and Cedar Rapids, Iowa, all with a loss of 0.4 months. The final entry in this list goes to Wichita, Kansas, which has a net 0 change, keeping its 1.6-month housing inventory from 2022 into 2023.

Predictions for 2023

With inflation just recently dropping from 40-year highs and housing starts still low by pre-pandemic standards, the housing inventory in 2023 is predicted to stay roughly the same. According to the National Association of Realtors (NAR), numerous factors will likely result in a stagnant housing inventory. These include loss of consumer confidence, difficulties financing and supplying housing starts, and homeowners not wanting to sell in the face of high-interest rates. 

Bincy Jacob, a founder of Advocates Real Estate Group, realtor, and consultant in the Greater Houston area, provides an excellent insight into the complexities of this issue, specifically regarding local markets and how current mortgage rates are impacting home sales: 

“All housing predictions must be hyper-local. Generally, here in Houston, we are not seeing the housing slump the way folks have talked about in other parts of the country. Even more locally, Houston's various neighborhoods have different availability and demand. Inventory is extremely low in popular neighborhoods with excellent schools.”

“In communities where there are no new construction homes, they are probably facing more of a housing shortage because of higher interest rates. It's not that buyers are not willing to use the higher interest rate for their first time or urgent purchase. It is that many sellers don't want to sell their home with an extremely low rate or extremely low refinanced rate in order to make that house available for another buyer… Lower interest rates are attractive to buyers, whether their first-time or multiple-time buyers. If they [local and federal governments] can find a way to incentivize first-time buyers and not allow homes to be picked up by large corporations to be placed on the market as rentals, that would really help the inventory issue.”

We contacted more industry experts for further insights into America’s home inventory and the housing market's future. Martin Orefice, CEO of Rent to Own Labs, gave us not only a succinct picture of the impact on interest rates but some interesting ideas on possible solutions:

“High interest rates are putting a serious drag on the housing market, including new construction, in the short term. In the long term, the elephant in the room is office space. It's looking increasingly unlikely that remote work is ever going to go away entirely, and this is going to create a glut of available office real estate in major downtown commercial districts and suburban office parks. If even some of this inventory gets converted into housing, it could radically increase the affordability of housing for both renters and buyers.”

However, one of the best summaries of the current market came from Alex Federo, Co-Owner of FTW Concrete Contractors

“There is no question that the housing market in the United States has been through a lot over the past few years. The inventory of available homes has shrunk, prices have gone up and down, and there has been a lot of uncertainty about what the future might hold.

Looking ahead, I believe that the housing inventory situation is going to improve in the short term. More homeowners are going to put their properties on the market as they see prices increase and they feel more confident about the future. This will help to ease the shortage of homes for sale and give buyers more options to choose from.

In the long term, I think that the US housing market will continue to grow and strengthen. Interest rates are likely to stay low, which will make buying a home more affordable. And as the economy continues to improve, more people will be looking to buy homes. This combination of factors should lead to healthy growth in the housing market over time.

There are a few things that local and federal governments can do to help stimulate housing inventory in both the short term and the long term. One is to provide incentives for homeowners to list their properties for sale. Another is to invest in affordable housing initiatives that help make buying a home possible for more people. These are just a few ideas, but if implemented, they could go a long way towards increasing housing inventory levels and keeping the housing market strong into the future.”

Final Thoughts

Unfortunately, we still face a serious shortage of affordable housing nationwide. While some areas are doing better than others, access to affordable housing is a universal problem that remains for the foreseeable future. Hopefully, initiatives like the Inflation Reduction Act will help pave the way for a more affordable future in which more homes are available. But, more work still needs to be done, and experts like Sebastian Jania, owner of Ontario Property Buyers, a real estate solutions and investment company, agree. When asked about potential solutions to the American Housing inventory issues, Sebastian stated: 

“In order to help stimulate more housing inventory, federal and local governments can provide grants and incentives to incentivize builders as well as residents to do their part to work on providing more housing through building and more housing through maximizing every property through intensification.”

Considering that the rate of production for new homes is being outpaced by the rate of population increase, there are really only two ways to solve this. One is to build more houses faster, and the other is to intensify living areas by providing more units per house. Instead of needing 20 houses for 20 families, by providing grants and incentives, basements can be converted to additional dwelling areas to house another family. This, coupled with the traditional building of houses, is a solution to this challenge.

In order to truly tackle the environment of a housing shortage, more housing through building and development as well as intensification of current houses is required. By doing these things, governments can be many steps closer to solving this issue.”

One thing remains clear: at the present rate of housing production, population growth will still outpace our current conventional efforts. In 2022, the United States population increased by 0.4%. While this may not sound like much, it represents an estimated 1.25 million people. Compare this to the 949,985 homes listed for sale in 2022, and you can see that, while progress is being made, we’re still coming up short. Hopefully, future innovations like 3D printed homes, micro-homes, and the renovation of presently unused business spaces will help bridge the gap between our population and housing supply. 


To calculate housing availability, we considered the 200 largest metro areas in the country and divided the total active listings of each one by the total number of homes sold over the previous month, using January 2023 data from Redfin. The resulting number is each metro area’s months of housing inventory (assuming no new homes entered the market.)

For context, most economists use this model as a baseline to describe buyer, seller, and neutral markets. Any market with less than five months of available homes is a seller's market, anything more than seven months is a buyer's market, and anything five through seven is a neutral market. 

To calculate where housing inventory is increasing the most and least, we compared the months of inventory in January 2022 and January 2023. Those with the largest upticks rank highest and vice versa.

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Editorial Contributors
avatar for Sam Wasson

Sam Wasson

Staff Writer

Sam Wasson graduated from the University of Utah with a degree in Film and Media Arts with an Emphasis in Entertainment Arts and Engineering. Sam brings over four years of content writing and media production experience to the Today’s Homeowner content team. He specializes in the pest control, landscaping, and moving categories. Sam aims to answer homeowners’ difficult questions by providing well-researched, accurate, transparent, and entertaining content to Today’s Homeowner readers.

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