While there was a shortage of single-family homes for sale due to underbuilding since the Great Recession, home builders increased production to meet the surge in demand that began 2020-2021, when mortgage rates were at historic lows. Single-family housing starts averaged 1 million or more in four of the last six years, helping ease some of the pressure on available inventory. The level of newly built single-family homes for sale climbed to a two-decade high, hitting the 500,000-unit mark in 2025. However, these new homes currently account for only approximately a quarter of the for-sale inventory. Existing homes make up the remainder and stood at a little below 1.3 million units to start 2026, still running well below the 20-year average of roughly 2.1 million units for sale.
Between still-challenging affordability conditions driven by elevated home prices and increasing mortgage rates, macroeconomic headwinds, and geographic mismatches of housing supply and demand, both new and existing home sales have remained slow, and we have a glut of unsold new homes in the aggregate, even while existing inventory remains low.
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