As home prices and mortgage rates remain high, housing demand has cooled, leading to an increase in unsold newly built homes. Since the peak of the pandemic housing boom, the number of completed but unsold single-family homes has steadily increased, growing from 77,000 in February 2020 to 119,000 by February 2025, according to the ResiClub blog.
Because of this, some home builders, especially in parts of the Mountain West and Gulf regions, are experiencing pressure to lower prices. To attract budget-conscious buyers, builders may need to offer price cuts or other incentives, which could increase builders' costs and reduce profitability. Homebuyers and sellers could also be affected by this rise in inventory, although in different ways.
Homebuyers/investors: The new construction market has more slack now than it did a few years ago, giving buyers in certain areas more leverage to negotiate better deals with homebuilders.
Home sellers: For sellers in markets where unsold new home inventory has surged, that means increased competition and it’ll likely put additional upward pressure on resale active inventory. Read more
