After one of the worst years for home sales in recent memory, the housing market off to a strong start in 2024.

According to, the number of active home listings on a typical day in February jumped by 14.8% compared to a year earlier, marking the fourth consecutive monthly increase. The number of newly listed properties increased by 11.3% compared to February 2023.

Overall, home listings in the top 50 metro areas by population increased by 7.6%.

“The first couple of months of 2024 have proven to be positive for inventory levels, as the number of homes actively for sale was at its highest level since 2020,” said Danielle Hale, chief economist of

While home listings remain well below pre-pandemic levels, Americans are finally catching a break in one key category: affordable homes.

Real estate listings in the coveted $200,000 to $350,000 price range jumped 20.6% compared to last year, faster than all other price categories. Currently, homes in this price range are much cheaper than the average sales price of an existing home, which was $417,700 at the end of 2023, per Fed data.

Home prices began to skyrocket during Covid, pricing millions of Americans out of the market. Prices shot up 49% between the second quarter of 2020 and the peak of the market in 2022, before correcting lower.

Despite the jump in housing inventories last month, economists say it’s only a fraction of what the country needs to bring balance back to the market.

Inventory to remain a problem for years to come

While estimates vary, the general consensus is that America’s housing shortage is in the millions. According to Moody’s Analytics, the total deficit is closer to 2 million.

That conclusion was reached even after researchers acknowledged a sharp rebound in housing construction last year. In 2023, multifamily housing completions increased by 11.1%, eventually hitting a seasonally adjusted 509,000 units.

Completions in the single-family housing market jumped 8.4% to 1.056 million units.

“One good year of ‘excessive’ supply was only in its relative term when compared with affordability-constrained demand,” Moody's researchers noted. “There is a long way to go before solving the chronical housing shortage.”

At the end of the day, America’s housing shortage has been years in the making after developers neglected to build enough properties following the 2008 financial crisis. As NPR notes, the housing shortage has even spilled over into the rental market, creating an affordability gap that disproportionately affects lower-income households.

According to a recent Creditnews Research report, nearly a third of U.S. homeowners are “house-poor,” meaning they spend more than 30% of their monthly income on housing costs.

It comes as no surprise that states with the most house-poor residents also have the highest housing costs in the country.

As it turns out, mortgages play a crucial role in how “house-poor” Americans are.

Waiting on mortgage rates

According to the Creditnews Research report, the share of house-poor households jumps to 37.2% for homeowners who still have a mortgage.

What makes this statistic even more shocking is the fact that nearly two-thirds (64.5%) of U.S. mortgages have rates below 4%, much lower than the current rate of around 7%.

It’s no wonder why so many buyers are sitting on the sidelines waiting for rates to drop.

According to Freddie Mac data, 30-year fixed-rate mortgages have increased for four consecutive weeks, reaching 6.94% as of Feb. 29. Meanwhile, the Mortgage Bankers Association (MBA) recently reported that rates eclipsed 7% for the first time since December.

Although higher rates have dampened housing market activity, according to Freddie Mac’s chief economist Sam Khater, momentum ahead of the spring buying season remains positive. MBA recently reported an 11% uptick in weekly mortgage applications, reflecting pent-up demand for homes.

Mike Fratantoni, MBA’s senior vice president and chief economist, said the increase is partly due to the relative decline in mortgage rates from their peak last year.

“Of note, purchase volume—particularly for FHA loans—was up strongly, again showing how sensitive the first-time homebuyer segment is to relatively small changes in the direction of rates,” he explained.