More Homes for Sale Isn’t a Warning Sign – It's Your Buying Opportunity

More Homes for Sale Isn’t a Warning Sign – It's Your Buying Opportunity

You may have heard that the number of homes available has recently hit a high. That might lead you to wonder if this signals another housing crash.

However, the truth is that data shows otherwise. In many places, growing inventory isn’t a negative—it actually reflects a shift toward a more balanced and healthier market.

What’s Happening with Inventory?

According to the most recent data from Realtor.com, housing inventory just reached its peak since 2020, represented by the white line in the chart below.

Still, it’s important to understand that even now, inventory hasn’t yet caught up to the pre-pandemic average levels (shown in gray):

This means there are currently more homes listed than we've seen in a while.

Even though inventory has grown notably compared to recent years, the number of available homes is still far from what’s considered normal. That context is key.

Why This Isn’t the Problem Many Assume It Is

When people hear inventory is increasing, they may immediately think of 2008—when a spike in inventory preceded a market crash. But things are quite different now.

The main reason? We’re not facing an oversupply—we’re still trying to recover from a housing shortage. The real issue is a persistent lack of available homes, and it’s been building for years.

The red bars in the chart below highlight the years since 2012 where new construction lagged behind household formation. The lower the bars, the larger the shortfall became (see graph below):

One of the main reasons this shortage has continued is that new construction hasn’t kept pace with the number of people looking to buy homes. The U.S. is currently short by millions of homes, and closing that gap will take time. As Realtor.com explains:

“At a 2024 rate of construction relative to household formations and pent-up demand, it would take 7.5 years to close the housing gap.”

That means, in most places, there’s no danger of having too many homes available. In fact, many markets are still in need of more inventory.

This is why the increase in homes for sale isn’t an issue nationwide—it’s actually addressing a supply shortfall that’s been building for years.

Bottom Line

Don’t be alarmed by the headlines. A growing inventory is not a sign of a downturn—it’s a move toward a healthier, more balanced housing market.