Why one region of America has over HALF of the housing inventory

Prospective homebuyers may want to turn their attentions to the South as new data shows it is undergoing an affordable housing boom.

Some 56.7 percent of all available homes in April was located in Southern states, according to a new report by Realtor.com.

Available inventory had climbed 19.7 percent year-on-year while it rose 18.4 percent in the Midwest, 7.5 percent in the West and 2.9 percent in the Northeast. 

A national housing shortage has been a driving factor in keeping prices artificially high in the face of soaring mortgage rates. 

However, Realtor.com's analysis suggests that trend is turning. In the past three months, the number of homes prices between $200,000 and $350,000 entering the market outpaced all other pricing categories.

The Southern metro areas which saw the biggest inventory growth were located in Florida. 

Tampa saw a 69.5 percent increase in available homes while Orlando and Jacksonville recorded 64.2 percent and 59.1 percent respectively. 

Realtor.com chief economist Danielle Hale said: 'The number of homes actively for sale was notably higher compared with last year.

'Sellers continued to list homes at a greater rate than last year. This has led to a promising increase in more affordable homes for sale, especially in the South.'

Across the board house prices increased seasonally from $424,900 in March to $430,000 in April - a figure which remained flat from last year.

'On the one hand, there is a small contingent of buyers who are really rooting for home prices to collapse so that affordability improves and they can become homeowners,' Hale said

'This group is probably disappointed by flat pricing. But when affordability is at long-term lows, a flat price trend is one way that the market corrects.'

The housing market has remained surprisingly buoyant despite experts predicting high mortgage rates would dampen demand.

The average rate on a 30-year fixed-rate home loan is currently 7.17 percent, data from Freddie Mac shows.

Home loans have been pushed up by the Federal Reserve's aggressive tightening cycle which has driven interest rates to a 23-year-high.

In real terms it means a buyer purchasing a $400,000 property with a 10 percent downpayment would face monthly payments of $2,436.

But had the same person bought a property in April 2021 - when rates were 2.98 percent - they would pay just $1,513 per month.

Economists predicted the trend would create a 'lock-in' effect' as buyers who secured 30-year loans when rates were at record-lows are now reluctant to give up their cheap deals.

But a shortage of homes has kept prices high despite dwindling demand.

What's more, buyers have been incentivized by expectations that the Fed will slash interest rates this year.