Housing Inventory is Growing - Here's Why

The inventory growth rate has slowed down recently, leaving many home buyers worried about finding the right home. But there is good news on the horizon: the total selection of homes on the market is poised to expand.

Here's why your options are likely to increase as the year progresses.

Inventory Growth Is Stabilizing

According to Realtor.com, active listings in July were up 2.1% year-over-year. While that is a distinct shift from the 10% year-over-year growth seen in January and the 31.5% jump in May 2025, inventory is still moving in a positive direction.

Over the last three months, inventory growth has consistently landed in a similar range. This plateau signals that the recent cooldown is reaching its floor, establishing a reliable baseline for inventory moving forward.

Total Inventory Hits a Multi-Year High

Despite a slower growth rate, total supply is at its highest point in years:

• 33 Months of Growth: National active listings have increased year-over-year for nearly three consecutive years.

• Double the Choice: Overall inventory has roughly doubled compared to the historic lows of 2021.

Best July Since 2019: Total homes for sale last month reached a post-pandemic high for the mid-summer season.

While national listings remain roughly 150,000 homes short of pre-pandemic averages, inventory is rapidly approaching normal levels and could match 2019 benchmarks by the end of the year.

How Mortgage Rates Are Driving Supply

Current mortgage rate dynamics are actually helping build inventory. As Mike Simonsen, Chief Economist at Compass, notes:

"When rates rise; inventory rises. When rates fall; inventory falls... If rates move higher from here or stay elevated for a longer period of time, then we should expect supply to build again."

With mortgage rates projected to remain in the mid-to-upper 6% range through the near term, housing supply is expected to continue accumulating. Realtor.com forecasts that total inventory will end the year up 3.6% year-over-year.

What This Means for Buyers

• More Choice: A steady rise in active listings means less competition per property and more choices tailored to your specific criteria.

• Better Leverage: Higher inventory balances the market, offering buyers stronger negotiation room on prices and concessions without the pressure to rush into an offer.

Bottom Line

The pace of inventory growth has cooled, but the overall selection of homes continues to expand toward pre-pandemic norms. Elevated mortgage rates are keeping inventory building, giving buyers more options, better bargaining power, and room to navigate their search without the pressure of an extreme seller's market. If you are planning a move, reach out to a local real estate professional to explore active listings in your area.