The housing market has experienced some of its most significant shifts in recent years, and 2025 is no exception. For the first time since the pandemic-driven housing boom, fourteen states now have more homes for sale than they did in 2019. This change represents a notable shift in supply and provides valuable insight into where the housing market may be heading in the near future.
Understanding these trends is crucial for both buyers and sellers. In this article, we’ll break down the national housing market landscape, explore the states leading the inventory rebound, analyze what’s driving these changes, and highlight what buyers and sellers should watch for moving forward.
Key Housing Market Definitions and Context
Before diving into the numbers, it’s important to clarify a few key housing market terms. “Active listings” or “inventory” refers to homes currently on the market that are truly available for purchase. Properties under contract or marked as pending are excluded from this count. “New listings” are homes recently added to the market during a given month.
These terms matter because housing inventory is one of the best indicators of market balance. More homes for sale typically mean buyers have more choices, stronger negotiating power, and less upward pressure on prices. Conversely, fewer homes for sale create competition, favor sellers, and can drive prices higher. The 2019 benchmark is especially relevant because it was the last “normal” year prior to the disruptions caused by the pandemic.
The National Housing Market Inventory Picture
As of August 2025, national active listings stood at approximately 1,098,000, representing a 21% increase compared to August 2024. This is a substantial year-over-year rise in housing market supply. However, inventory remains about 11% below 2019 levels, indicating that while the housing market has recovered from the pandemic lows, it has not fully returned to pre-pandemic norms.
Growth in inventory has slowed in recent months, and this is not purely seasonal. A number of sellers have delisted their homes, temporarily or permanently, which has moderated the increase in available housing. This highlights that even in a rising market, supply dynamics are complex and influenced by seller behavior.
Historical Perspective on the Housing Market
To understand the current housing market, it helps to review recent trends. In August 2017, there were about 1,325,000 active listings. This dipped slightly to 1,286,000 in 2018 and further to 1,235,000 in 2019. The pandemic era then caused a dramatic drop in inventory: 779,000 in 2020 and 574,000 in 2021, which marked the lowest point of the housing market boom.
Since then, inventory has steadily climbed: 726,000 in 2022, 670,000 in 2023, 909,000 in 2024, and now over 1,098,000 in 2025. If the current pace continues, housing market supply could approach 1,288,000 by 2026, approaching late-2010s levels. While not a forecast, this trajectory illustrates the potential path of housing market recovery.
State-Level Housing Market Story
Fourteen states now exceed 2019 inventory levels: Alabama, Arizona, Colorado, Florida, Hawaii, Idaho, Nebraska, Nevada, Oklahoma, Oregon, Tennessee, Texas, Utah, and Washington. The District of Columbia also surpasses pre-pandemic supply. Geographically, the inventory rebound is strongest in the Sun Belt and Mountain West, with a few coastal states included.
Meanwhile, much of the Midwest and Northeast remain below 2019 inventory levels. This demonstrates that while the national housing market is showing improvement, conditions vary significantly across regions, influencing both buyer and seller dynamics locally.
Why Housing Market Inventory Is Rising
Several factors are contributing to the rise in housing market supply. Affordability challenges play a significant role, as high prices and mortgage rates have priced many buyers out of the market. Additionally, new home construction, particularly in the Sun Belt, has added supply and created competition for resale properties through incentives like rate buy-downs. Finally, the “lock-in effect” has kept millions of homeowners with low mortgage rates from listing their homes, although 2025 shows some easing of this trend.
Even with increased listings, existing home sales have not yet surged. The housing market is absorbing more supply, but not at a rate that dramatically accelerates turnover, giving buyers time to explore their options without intense competition in many areas.
Regional Softening and Housing Market Prices
The trend toward higher inventory is not limited to the Sun Belt. West Coast markets, including California, are also experiencing increasing supply alongside weaker demand. In markets where inventory has exceeded 2019 levels, price growth has slowed or even declined in some cases. Conversely, in areas where inventory remains below 2019, sellers maintain stronger pricing power and market leverage.
Nationally, home prices have been largely flat in 2025. The housing market is balancing softening regions with those that remain tight, resulting in relatively stable overall pricing trends.
Shifts in Housing Market Power
Since the pandemic boom ended in 2022, the housing market has seen a gradual shift in power. Seller’s markets have become balanced, and balanced markets have tilted toward buyers in many high-inventory states. Buyers now have more negotiating power, can request concessions, and have more time to make decisions. Sellers face longer market exposure and increased competition.
In contrast, tight markets still favor sellers, with faster sales and stronger pricing. Understanding these shifts is critical for navigating the current housing market.
What to Watch in the Housing Market
Looking ahead, several factors will influence the housing market. First, monitor new listings — if homes are added faster than they sell, inventory will continue to rise. Second, mortgage rates — a decline could bring more buyers and prompt additional sellers to list. Third, builder activity — ongoing incentives could soften resale markets, particularly in the Sun Belt. Lastly, regional differences — the Midwest and Northeast are currently moving differently than the Sun Belt and West Coast.
Closing Takeaway on the Housing Market
By August 2025, fourteen states have surpassed pre-pandemic inventory levels, while national housing market supply has increased year-over-year but remains below 2019. Buyers are gaining leverage in many regions, and sellers must adapt strategies in markets with rising inventory. The housing market is shifting unevenly, so staying informed about local conditions is essential for making smart buying or selling decisions.
FAQ
What is considered active inventory in the housing market?
Active inventory includes homes currently available for sale. Homes that are under contract or pending are excluded.
Why is 2019 a key benchmark for housing market trends?
2019 represents the last “normal” year before the pandemic, providing a baseline to compare current housing market conditions.
Does higher inventory mean prices will drop everywhere?
Not necessarily. Higher inventory can put downward pressure on prices, but local demand, job growth, and other factors can keep prices stable.
How do mortgage rates affect the housing market?
Lower rates often stimulate buyer demand and can encourage more sellers to list, while higher rates can slow both buying and selling activity.
Is it a good time to buy or sell?
It depends on your local market. Buyers benefit in high-inventory areas, while sellers perform better in tight markets. Checking local housing market data is essential before making decisions.
