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Many of the softest housing markets, where homebuyers have gained the most leverage over the past four years since the pandemic housing boom ended, are located in Southern and Mountain West regions.
Many of those areas were home to the nation’s top pandemic boomtowns, which experienced significant home price growth during the pandemic housing boom, stretching housing prices beyond local income levels. Once pandemic-fueled domestic migration slowed and mortgage rates spiked, markets like Punta Gorda, Florida, and Austin faced challenges as they had to rely on local incomes to sustain frothy home prices.
The housing market softening in these areas was further accelerated by the abundance of new home supply in the pipeline across the Sunbelt. When and where needed, builders are often willing to reduce prices or make other affordability adjustments to maintain sales. These adjustments in the new-construction market also create a cooling effect on the resale market, as some buyers who might have opted for an existing home shift their focus to new homes where deals are available.
In contrast, many Northeast and Midwest markets were less reliant on pandemic domestic migration and have less new-home construction in progress. With lower exposure to that migration pullback demand shock—and fewer homebuilders doing large incentives—active inventory in these Midwest and Northeast regions has remained relatively tight. That’s still the case entering the 2026 summer housing market.
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Generally speaking, housing markets where inventory (i.e., active listings) has returned to pre-pandemic 2019 levels have experienced weaker home price growth (or outright declines) over the past 47 months. Conversely, housing markets where inventory remains far below pre-pandemic 2019 levels have, generally speaking, experienced more resilient home price growth over the past 47 months.
While this data cut (active inventory in a market compared to the same month in pre-pandemic 2019) will slowly become less useful over time as underlying population bases shift, it remains useful now. A swift inventory rebound from the ultralow levels during the pandemic housing boom would have taken a sharp supply-demand equilibrium shift that would have given homebuyers more power as it occurred.
As you can see in the map above, many of the metro-area housing markets where active inventory remains furthest below pre-pandemic 2019 levels are concentrated in pockets of the Midwest and Northeast. For example, markets like Chicago, and Hartford, Connecticut, have 63% and 78% less inventory than pre-pandemic 2019 levels, respectively.
Of course, there are some exceptions in the Midwest and Northeast. While the Columbus, Ohio, metro area is tighter than, say, the Austin metro area, the market there isn’t as tight right now as some of its Midwest peers, like Milwaukee.
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Some regional housing markets in Texas, Florida, and Colorado, where inventory has risen above pre-pandemic 2019 levels, are experiencing mild home price corrections. Tightish inventory markets in some pockets of the Northeast and Midwest remain somewhat resilient, with home prices likely pushing up a little this year. Metro-area housing markets like Milwaukee, and Hartford, Connecticut, are still seeing home prices rise 5.3% and 5.2% year over year, respectively.
As ResiClub has documented closely, Southwest Florida has been the epicenter of housing market softness/weakness over the past two years. While that’s still the case (in particular in Punta Gorda), we should note that some pockets of Southwest Florida are seeing year-over-year declines in active inventory for sale—suggesting that the weakening/correction is losing some momentum there.
