U.S. home sales are growing fastest in markets where housing inventory has recovered most fully from pandemic-era shortages, with Austin leading the nation in both sales growth and available supply, according to a new Zillow analysis.
The report found Austin recorded a 20% year-over-year increase in home sales while inventory stood 52% above pre-pandemic levels, highlighting a trend that economists say is helping revive housing activity in parts of the South and West despite elevated borrowing costs and affordability pressures.
Nationally, home sales rose 2.3% in April from a year earlier, while active listings increased 3.7%. Inventory, however, remains 18.7% below historical norms, limiting the pace of recovery in many markets.
Housing supply has now surpassed pre-pandemic levels in 19 of the nation’s 50 largest metropolitan areas, primarily concentrated in Southern and Western states. Many of those markets are also posting some of the strongest sales gains.
“After years of low supply, markets with restocked shelves are seeing relatively stronger sales growth,” said Zillow Senior Economist Orphe Divounguy. “Having more homes on the market is helping the market function again.”
Austin was not alone. Among the 10 major metropolitan areas with the strongest annual sales growth, six now have more inventory than they did before the pandemic, suggesting that additional housing supply is playing a key role in improving market activity.
Affordability has also improved in several high-growth markets. Zillow found the typical monthly mortgage payment has fallen 9.8% from a year earlier in Austin, 7.4% in Dallas, 7% in Denver, 6.2% in Raleigh, and 6% in San Antonio.
Divounguy said inventory constraints continue to limit broader market activity.
“A lack of supply and stretched consumer budgets are contributing to lower sales volumes,” he said. “The lack of inventory has prevented a larger price correction and limited improvements in affordability. And ultimately, shoppers can’t buy what isn’t for sale.”
Despite the increase in inventory, the pace at which individual homes are selling remains close to pre-pandemic norms. Zillow reported that listings going under contract are doing so roughly one day faster than they did during 2018 and 2019.
The larger gap remains the number of homes available and being listed for sale. Compared with pre-pandemic averages, April inventory was down 19%, total sales were down 18%, and new listings were down 16%.
The findings suggest that while affordability challenges and economic uncertainty continue to weigh on housing demand, markets that expanded housing supply more aggressively are beginning to see stronger transaction activity and improved market liquidity.
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