Housing Inventory Surges 21.5% in May 2025: What This Means for Buyers and Sellers
Discover how the housing market inventory increased by 21.5% year-over-year in May 2025, signaling a potential market recovery despite slower growth rates.
Housing inventory rose significantly compared to last year, though the pace of growth has moderated for the third consecutive month.
In May 2024, the number of homes available for sale grew by 21.5% compared to May 2023, reflecting a modest easing in the shortage of properties, according to the latest Realtor report.
Despite the overall inventory improvement, the rate of increase has slowed for the third month in a row, indicating a cautious market environment.
Key Insights
- Year-over-year, home listings increased by 21.5% in May 2024, but the momentum slowed as fewer homeowners decided to list their properties.
- Total listings, including homes under contract but not yet sold, experienced their first year-over-year decline since June 2023.
- Pending home sales dropped by 18.1% compared to May 2023, signaling a shift in buyer activity.
The combined total of homes for sale and those under contract decreased slightly by 0.2% compared to the same month last year.
Pending sales numbers also fell by 18.1%, an improvement from April's 22.5% drop and a recovery from December's steep 36.9% decline year-over-year.
Although home sales have softened, experts suggest this may indicate the early stages of a market rebound.
"The stabilization and gradual improvement in pending home sales hint that transaction volumes may have bottomed out and are slowly recovering," the report states.
Southern Metro Areas Lead Nationwide Inventory Growth
Across the 50 largest U.S. metro areas, housing inventory rose by 20.8% year-over-year, with the South driving most of this growth. However, inventory levels in the South remain 40.9% below pre-pandemic figures.
Nashville experienced a remarkable 124.76% increase in inventory, followed by Austin at 112.5%, and San Antonio with a 93.4% rise.
Conversely, the Midwest saw only a 1.5% increase year-over-year but remains 54.6% below pre-pandemic levels. The West faced a 5.2% decline in large metro inventories and stands 37% below pre-pandemic figures. The Northeast experienced an 8.5% drop and is 61.6% below pre-pandemic inventory levels.
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