U.S. Housing Supply Jumps to 5-Year High
The U.S. housing supply has surged to its highest level in five years, indicating a significant shift in the real estate market. There are currently 1.45 million homes for sale in the U.S., the most active listings seen since March 2020, and a 16.7% year-over-year increase.1 As a result, homebuyers and real estate investors are presented with a broader array of options, potentially easing the competitive pressure that has characterized the market in recent years.
When the number of homes available for purchase exceeds the number of interested buyers, the housing market favors buyers. Excess housing inventory can lead to price cuts and seller concessions, such as paying part of the buyer's closing costs or the cost of needed home repairs discovered during the inspection. "Homebuyers and real estate investors in markets with a sizeable inventory of unsold homes might be in a good position to negotiate and land a deal," said Brett Hively, Senior Vice President of Mortgage, Finance, and Strategy at Ameris Bancorp. "These conditions can lead to more favorable pricing and perks for buyers." In April 2025, less than one-third of homes sold exceeded their asking price, the lowest April share in five years.2
Excess housing inventory can occur due to a multitude of factors. Homeowners may decide to list their properties for sale for various reasons, such as relocating for a job, downsizing after children have moved out, or seeking to upgrade to a larger home. Economic conditions, such as rising interest rates or a slowdown in the local economy, can also prompt homeowners to sell, as they may want to capitalize on their investment before values potentially decline.
It remains to be seen if this imbalance between supply and demand will continue through summer months. "Should mortgage rates decline, we could see an uptick in homebuying enthusiasm," said Hively. "This has the potential to reduce current inventory levels and set the stage for a more competitive housing landscape." The next Federal Open Market Committee (FOMC) meeting will be on June 17–18, 2025, and recent statements from Federal Reserve officials suggest a low likelihood of reducing the federal funds rate.3 The federal funds rate indirectly affects interest rates for longer-term loans, such as mortgages.
Sources:
1, 2 https://www.nasdaq.com/press-release/redfin-reports-spring-homebuying-season-sputters-supply-jumps-5-year-high-existing
3 https://www.bloomberg.com/news/articles/2025-05-19/williams-says-fed-needs-beyond-june-july-to-get-clearer-outlook
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Ameris Bank is not affiliated with nor endorses Nasdaq or Bloomberg.
Signs of a Buyer's Market
When the number of homes available for purchase exceeds the number of interested buyers, the housing market favors buyers. Excess housing inventory can lead to price cuts and seller concessions, such as paying part of the buyer's closing costs or the cost of needed home repairs discovered during the inspection. "Homebuyers and real estate investors in markets with a sizeable inventory of unsold homes might be in a good position to negotiate and land a deal," said Brett Hively, Senior Vice President of Mortgage, Finance, and Strategy at Ameris Bancorp. "These conditions can lead to more favorable pricing and perks for buyers." In April 2025, less than one-third of homes sold exceeded their asking price, the lowest April share in five years.2
Factors Contributing to Excess Housing Inventory
Excess housing inventory can occur due to a multitude of factors. Homeowners may decide to list their properties for sale for various reasons, such as relocating for a job, downsizing after children have moved out, or seeking to upgrade to a larger home. Economic conditions, such as rising interest rates or a slowdown in the local economy, can also prompt homeowners to sell, as they may want to capitalize on their investment before values potentially decline.
Predictions for Summer
It remains to be seen if this imbalance between supply and demand will continue through summer months. "Should mortgage rates decline, we could see an uptick in homebuying enthusiasm," said Hively. "This has the potential to reduce current inventory levels and set the stage for a more competitive housing landscape." The next Federal Open Market Committee (FOMC) meeting will be on June 17–18, 2025, and recent statements from Federal Reserve officials suggest a low likelihood of reducing the federal funds rate.3 The federal funds rate indirectly affects interest rates for longer-term loans, such as mortgages.Sources:
1, 2 https://www.nasdaq.com/press-release/redfin-reports-spring-homebuying-season-sputters-supply-jumps-5-year-high-existing
3 https://www.bloomberg.com/news/articles/2025-05-19/williams-says-fed-needs-beyond-june-july-to-get-clearer-outlook
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Ameris Bank is not affiliated with nor endorses Nasdaq or Bloomberg.