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Home Inventory Is Surging, and This Could Be Just the Beginning

Writer's picture: Juan Soto Juan Soto

Home inventory is surging, sellers are returning, and buyers have more options. Could 2025 be the year the market takes off again?

The real estate market is heating up, and I couldn’t be more excited. Home inventory levels just hit their highest January mark since 2021, signaling a major shift. According to Realtor.com, the number of homes for sale is climbing fast, creating fresh opportunities for both buyers and sellers. But the big question is—can this trend keep going?


A Massive Surge in New Listings


One of the most bullish signals in today’s market is the explosion of new listings. In January 2025, we saw a jaw-dropping 37.5% jump in newly listed homes compared to December. That’s no fluke—it’s part of a 15-month streak of annual inventory growth, with a 24.6% increase in active listings from January 2024.

Sure, inventory levels are still trailing 2017 and 2019 numbers, but the momentum is undeniable. Many homeowners who were on the sidelines due to high mortgage rates are now jumping into the market. What’s driving this? Easing mortgage rates and a weakening of the “lock-in effect,” according to Danielle Hale, chief economist at Realtor.com. And I have to agree—this shift could be a game-changer.


Buyers and Sellers Are Finally Moving Again


For two years, buyers and sellers were locked in a standoff. With mortgage rates pushing past 7%, sellers clung to their low-rate mortgages, and buyers hesitated to enter an expensive market. But that’s changing—fast.

“The shift in seller activity could mark a turning point,” Hale points out. And the numbers back her up. Pending home listings are up 1.8% year-over-year. Sure, it’s a slower growth rate than December’s 7.4% jump, but it’s still growth—even with higher mortgage rates.

This tells me one thing: Demand is still alive. And if rates ease even a little, we could see a surge in buying activity that takes this market to the next level.


Where the Growth Is Happening


Inventory is rising across the board, but some regions are seeing explosive gains:

West: +31%

South: +27%

Midwest: +16.8%

Northeast: +7.8%


At the metro level, Denver is leading the pack with a 54.8% increase in homes for sale. Las Vegas (+49.4%) and Tucson (+45%) aren’t far behind. Interestingly, only 14 metros have surpassed pre-pandemic inventory levels, with Denver, San Antonio, and Dallas leading the charge.


Are Homes Selling Faster? Not Yet—But That Could Change


More inventory is great news, but right now, homes are taking longer to sell. The average time on market in January hit 73 daysfive days longer than last year and the slowest January since 2020.

The South and West are seeing the biggest slowdowns, with homes sitting five to six days longer. Meanwhile, the Midwest is defying the trend, selling homes two days faster than last year.

But let’s be clear—this isn’t necessarily a bad thing. More inventory gives buyers more choices, and sellers adjusting their expectations means more realistic pricing. This market is shifting, and I see that as a huge positive.


Price Cuts: A Buying Opportunity?


Sellers are starting to adjust to longer market times by cutting prices. Over 15% of listings had price reductions in January, slightly higher than last year. And the median home price? Down to $400,500, a 2.2% dip from January 2024.

This tells me two things: 1) Sellers are serious about moving their homes, and 2) buyers have a real shot at getting better deals. If mortgage rates dip even slightly, I wouldn’t be surprised to see a buying frenzy in the coming months.


What’s Next for the Housing Market?


I’m bullish on where this market is heading. The lock-in effect is weakening, sellers are coming back, and inventory is rising. If mortgage rates stabilize or better yet, drop—the pace of market activity could accelerate.

The big question: Will this inventory surge last, or is it just a reaction to last fall’s lower rates? While we’re still below pre-pandemic inventory levels, the momentum is undeniable.

Right now, we’re looking at a more balanced market—a rare sweet spot where both buyers and sellers can find opportunities. If this trend holds, 2025 could be the year real estate really takes off again.


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