Home Sales Gain Momentum in Sun Belt, Mountain West Markets as Inventory Rebound Improves Affordability

Home sales are accelerating in U.S. cities where housing inventory has expanded, including Nashville, Dallas and Denver, reversing the post-pandemic freeze in these markets, according to Zillow and local agents. The combination of rising supply and stable or slightly lower prices has narrowed the affordability gap, drawing buyers back during the spring selling season. In Murfreesboro, Tennessee, near Nashville, inventory rose 8% to 10% year-over-year and sales climbed, with about a third of homes going under contract in less than a week, agent John Turner said. Zillow senior economist Orphe Divounguy noted the inventory gains are “paying off” by unfreezing markets, but nationwide supply remains 19% below 2018-2019 levels. A brief dip in mortgage rates below 6% earlier this year helped trigger demand, and builders have expanded aggressively in suburbs like Indianapolis, adding supply that agents say has restored 2% to 3% annual price appreciation—a sign of stability. However, national inventory growth is slowing, and recent mortgage rate increases plus labor market uncertainty may cool activity sooner than expected. Sun Belt and Mountain West cities with robust new construction are most likely to have inventory above pre-pandemic norms, but the relative equilibrium between buyers and sellers now faces headwinds from affordability pressures and economic risks.