While the overall national housing market has cooled, the housing supply gap created by slow construction after the Great Recession continues to affect the ability of potential homeowners to buy.

The total number of homes for sale in the United States reached 945,612 in February, up 13% from the all-time low in February 2022, according to Realtor.com. But heading into the spring buying season, the most recent national inventory figures remain below the magic 1 million mark, and the nation's housing inventory is still down 30% from five years ago.

Because the housing market is best defined at the local level, MarketWatch analyzed county-by-county data to examine which areas saw the biggest inventory declines in February.

Last month, Lake and DuPage counties outside Chicago were the two large-market counties with the biggest declines in total inventory from five years ago, down 62% and 59%, respectively. MarketWatch analyzed two Chicago suburbs in December, when they also appeared at the top of the large counties we analyzed with the lowest housing inventory.

MarketWatch defines a large market as 54 counties with at least 5,000 listings in any given month in 2017. Of those 54 large markets, 29 had five-year inventory declines equal to or greater than the national decline of -30%.

But the U.S. housing market remains vibrant, and there are big regional variations. After all, all real estate markets are local. Two counties where the availability of homes to buy fell sharply in early 2022 have now substantially recovered their housing inventory. A year ago, Wake County, North Carolina, which includes Raleigh and its suburbs, and Clark County, Nev. Two counties, including Las Vegas, were among the three in the United States with the largest drop in total listings from five years ago.

But last month, the total number of homes listed in Wake County more than tripled from last year to 4,276, surpassing even the level of 2017, the earliest year MarketWatch has tracked. Over the past six years, Wake County's inventory has increased by 4 percent and that improvement extends to North Carolina's Triangle, where Durham County's population is up 143 percent from last year and 44 percent from five years ago.

In Clark County, Nevada. U.S. housing inventory more than doubled in February from a year ago to 7,779 units, though it was still 15% lower than five years ago.

El Paso, Texas, was the county with the biggest drop in housing inventory almost every month last year, according to a MarketWatch analysis. The number of homes available for purchase in El Paso increased 70 percent in February 2023 compared to February 2022. Still, El Paso is the county with the third largest inventory decline over the past five years, down 58%(after Lake and DuPage counties).

Housing inventory in many small counties also dropped significantly in 2022. Some of them have shown substantial improvement so far this year, but most still have low inventory levels. At MarketWatch, we defined small markets as counties with a total of at least 500 listings in any given month in 2017 and fewer than 2,500 listings in each month of 2017.

Similar to last year, smaller counties in northeast China are still struggling with housing inventory levels. Vermont's three counties were among the four small counties in the country that saw the biggest declines in housing inventory levels. MarketWatch found last year that three Maine counties (Lincoln, Hancock and Franklin) had the biggest declines in housing inventory, but were still in the top 10 for total housing inventory declines, but improved year-over-year.

Homes for sale in Sawyer County, Wisconsin. That's still down 82% from five years ago, although the total number of listings is up 8% from a year ago. Chautauqua County, New York, had the second-highest reduction in homes for sale, but the county's annual inventory increased 60% through February, according to a May 2022 MarketWatch analysis.

More than half of the 604 small markets analyzed by MarketWatch are at or above the five-year decline in total national listings through February 2023.