What’s New
The US housing market is experiencing a surge in new inventory, with the number of homes sitting vacant and waiting for a buyer reaching near-record levels not seen since the 2008 bubble. According to Nick Gerli, CEO of Reventure App, the number of newly built, ready-to-move-in homes for sale has exploded in the South this year, reaching levels close to 2008.
Why It Matters
The surge in inventory is a significant shift in the housing market, marking a rebound from the shortage experienced from 2012-2022. The country has long struggled with a housing shortage that has inflated prices and pushed the property ladder out of reach for many Americans. New inventory is good news, but only if it is matched by a rise in demand from buyers. Currently, with stubbornly high mortgage rates and rising home prices, sales remain relatively low despite pent-up demand.
What To Know
Housing inventory dipped dramatically at the national level between 2008 and 2022, causing an ongoing shortage that has squeezed many aspiring first-time homebuyers out of the market. This trend is now slowly turning. The number of spec homes on the market this year reached 124,000, the highest level in at least the past decade.
The situation is mostly isolated to the South and parts of the Mountain West, where home builders have permitted lots of homes during the pandemic boom and continue to permit homes despite buyer demand cooling. The result is a big pileup of homes for sale.
According to Gerli, these regions are no longer experiencing a housing shortage. Active listings on the re-sale market have spiked and are back to pre-pandemic levels. He expects prices to drop in these regions, particularly in Texas and Florida.
On the other hand, the housing shortage is still ongoing in the Northeast and Midwest, where builders ignore. Active listings in these regions are still in a big deficit to pre-pandemic levels.
What People Are Saying
Nick Gerli wrote on X, “We could see even more spec inventory hit the market in 2025, because the builders also have a lot of homes for sale under construction. There’s 266,000 houses for sale currently under construction. That’s also the 2nd highest level for any previous housing cycle. Only trailing the mid-2000s bubble.”
What’s Next
Gerli’s warning is echoed by other analysts who warn that the US housing market might slide in a similar direction to the one that led to the 2008 housing crash. The Senate Budget Committee has also warned that rising premiums, combined with still high home prices and mortgage rates, might lead to a housing crash worse than the one in 2008.