Maybe you’ve heard the number of homes for sale has reached a recent high. And it might make you question if this is the start of another housing market crash.
But the reality is, the data proves that’s just not the case. In most areas, more inventory isn’t bad news. It’s actually a sign of the market returning to a more stable, healthy place.
What’s Going on With Inventory?
Based on the latest data from Realtor.com, inventory just hit its highest point since 2020, shown with the white line in the graph below.
But what you need to realize is, at the same time, inventory levels still haven’t returned to pre-pandemic norms (shown in gray):
That means there are more homes for sale now than there have been in quite some time.
And while it’s true inventory is up significantly compared to where it was over the last few years, the number of homes on the market is still well below typical levels. And that’s important context.
Why This Isn’t the Problem A Lot of People Think It Is
Some people hear inventory’s rising and immediately think about 2008. Because back then, inventory spiked just before the market crashed. But today’s situation is very different.
Here’s the key reason why. We don’t have a surplus of homes; we have a deficit to climb out of. What we’re dealing with is a long-term housing shortage – and it’s a big one.
The red bars in the graph below show all the years where housing starts (new builds) didn’t (click "Learn More" to finish the article)...
