Despite housing inventory hitting its highest level since 2018, buyers are staying away in droves. The culprit? Sky-high mortgage rates hovering around 6.6% and stubborn home prices that put ownership out of reach for many. Only 8.7% of listings are affordable to households earning $50,000, while the wealthy snap up properties with cash offers. The market’s current state feels like a cruel joke – plenty to see, but good luck buying. There’s more to this frustrating story than meets the eye.
Five years of tight housing inventory are ultimately showing signs of easing. Housing supply has reached its highest level since 2018, with both new construction and existing home listings contributing to the surge. Single-family homes for sale have jumped 20% compared to last year, and new home inventory sits at a whopping 481,000 units – numbers we haven’t seen since 2007.
But here’s the kicker: buyers aren’t exactly rushing to grab these homes. Why? Well, those pesky mortgage rates hovering around 6.6% aren’t helping. Neither are those eye-watering home prices that have many potential buyers clutching their wallets in despair. For perspective, households earning $50,000 can only afford a measly 8.7% of what’s available on the market. Talk about slim pickings. Some sellers are turning to all-cash offers to ensure quick, hassle-free transactions in this challenging market.
The recovery isn’t uniform across the country, though. Some regions are faring better than others. Texas, Florida, and Tennessee are showing off with inventory levels that have actually surpassed their pre-pandemic glory days. Colorado’s joining the party too. Those earning $200,000 or more have access to nearly all available listings in these markets. Recent data shows the Midwest markets shine with homes priced over $125,000 less than the national median.
But don’t pop the champagne just yet – many areas are still struggling to reach their historical supply averages. The market’s particularly rough for middle and lower-tier buyers. While the luxury market keeps humming along, regular folks are caught in a frustrating game of “look but don’t touch.”
Even with more homes to choose from, the combination of high prices and steep interest rates has turned many potential buyers into reluctant window shoppers. Price growth is eventually showing signs of cooling in some markets, but it’s more like turning down the heat from “scorching” to “merely hot.”
The outlook for 2025 suggests continued but subdued growth. Meanwhile, existing home sales remain stubbornly low, proving that just because you build it (or list it), doesn’t mean they’ll come – not when the cost of entry feels like winning the lottery is a prerequisite for homeownership.
