Active Listings Reach Six-Year Peak as Market Recovery Takes Shape
The U.S. housing market is beginning to show signs of life, with the number of active listings hitting a six-year high in May 2025. According to the latest Monthly Housing Trends Report from Realtor.com, inventory levels have climbed past one million homes for the first time since early 2019. But while some parts of the country are bouncing back, others are still lagging far behind.
A Nation Divided by Inventory Recovery
Inventory is growing nationwide, but the pace of recovery varies dramatically by region. Only metro areas in the South and West have fully returned to their pre-pandemic inventory levels. Markets in the Northeast and Midwest continue to struggle with a shortage of homes for sale.
Here’s how inventory growth looked across the U.S. in May:
- West: +40.7%
- South: +32.9%
- Midwest: +22.9%
- Northeast: +19.0%
“Crossing the one million active listings mark is a major milestone,” said Danielle Hale, Chief Economist at Realtor.com. “But supply isn’t evenly distributed. Markets that ramped up construction during the pandemic are seeing more inventory and slightly lower prices, while others that didn’t build as much are still feeling the pinch.”
By the Numbers: May 2025 Housing Snapshot
| Metric | May 2025 | Monthly Change | Yearly Change | Since May 2019 |
|---|---|---|---|---|
| Median listing price | $440,000 | +2.0% | +0.1% | +37.5% |
| Active listings | 1,036,101 | +8.0% | +31.5% | -12.3% |
| New listings | 465,096 | -1.4% | +7.2% | -20.4% |
| Median days on market | 51 days | +1 day | +6 days | -1 day |
| Listings with price reductions | 19.1% | +1.1 pts | +2.4 pts | +3.7 pts |
| Median list price per sq. ft. | $234 | +0.5% | +0.6% | +53.3% |
Where Inventory Is Bouncing Back the Fastest
Out of the 50 largest metro areas in the U.S., only 22 have fully recovered their pre-2020 inventory levels—and every one of those is in the South or West.
Top performers include:
- Denver, CO: +100% vs. pre-pandemic
- Austin, TX: +69%
- Seattle, WA: +60.9%
On the flip side, markets still struggling to rebound include:
- Hartford, CT: -77.7%
- Chicago, IL: -59.3%
- Virginia Beach, VA: -56.7%
Despite the increase in available homes, these gains haven’t translated into a red-hot buying season. More listings are lingering on the market, and price cuts are becoming increasingly common.
Slower Sales, More Price Flexibility
Homes are now sitting on the market for an average of 51 days six days longer than last year. The share of listings with price reductions hit 19.1% in May, the highest percentage seen since at least 2016.
Markets with the largest share of discounted listings include:
- Phoenix, AZ: 31.3%
- Tampa, FL: 29.9%
- Denver, CO: 29.4%
“Buyers finally have choices again,” said Gary Ashton of RE/MAX Advantage in Nashville. “And sellers are starting to adjust by offering price reductions and concessions.”
In Southern cities like Nashville, more homes on the market are leading to longer listing times and a slight uptick in sale prices up about 3%. Sellers in these markets may soon find themselves needing to negotiate more than they have in years.
Why Some Regions Are Still Struggling
In the Midwest and Northeast, inventory recovery has been much slower. While there’s been improvement year-over-year, key markets remain far below their historical averages:
- New York metro: -44% vs. 2017–2019 average
- Washington, DC metro: -15.9%
Only 22 of the 50 largest metro areas have returned to pre-pandemic inventory levels, but the trend is improving. That number has steadily increased from 18 in March to 22 in May.
Construction trends help explain this regional divide. Cities like Austin, Nashville, and Denver saw significant housing development during the pandemic, which is now translating into more homes on the market. By contrast, areas with limited new building like Boston, Buffalo, and New York continue to see tight supply.
Long-Term Supply Gaps Persist
The uneven recovery mirrors the findings of Realtor.com’s Housing Supply Gap Report, which estimates a nationwide shortage of nearly 4 million homes. Unless sweeping reforms are made such as easing zoning rules, streamlining permitting, and incentivizing new construction many regions, especially in the Northeast and Midwest, could fall even further behind.
For now, buyers in certain cities will enjoy more options and negotiation power. But for others, particularly those in underbuilt markets, the struggle to find an affordable home continues. For more information about finance visit Nadlan Capital Group.
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