Homes for Sale Are Piling Up, Just Not Where the Buyers Are

Lately the housing market has faced a different conundrum at every turn. This year’s puzzle is the disconnect between an aggressive rise in the number of existing homes for sale and still sluggish transactions.

There are two reasons for this. The first has to do with which markets are seeing the fastest growth in resale inventory, while the second is more about the “vibes.” The bottom line is that in most of the country, even as the number of for-sale homes increases, we can still expect sellers to wait for buyers to come to them rather than chasing would-be buyers with discounts.

For all the talk about the mortgage rate lock-in effect keeping owners from listing their houses, resale inventory climbed a substantial 35% year-over-year through May at the national level, according to data from There are currently more homes for sale in the US than there have been since July 2020.

Yet, as of April, existing home sales have fallen compared with a year ago, even though they are off last year’s lows. Mortgage purchase applications have barely inched up, suggesting any uptick in transactions is largely down to all-cash buyers. Data from Altos Research shows that after healthier increases in March through the early part of May, the number of homes going into contract as we exited last month barely grew from a year earlier.

A paucity of inventory was blamed for weak transactions last year, but what explains this year’s anemic sales? The answer lies in where we’re getting that inventory growth. We’ve seen an especially large increase in Florida, as well as substantial increases in some of the other Gulf Coast states and Arizona. But, as Lance Lambert of housing analytics site ResiClub notes , zooming out to look at how things have changed on a five-year basis shows that most of the country has significantly fewer homes for sale today.