The U.S. housing supply has reached its highest level in five years, There are currently 1.45 million homes for sale, the most since March 2020 (up 16.7% from last year).1 This gives buyers and investors more options, potentially easing the competitive pressure we’ve seen in recent years.

Signs of a Buyer's Market

When the number of homes available for purchase exceeds the number of interested buyers, the housing market favors buyers. Excess housing inventory can cause price cuts and seller concessions, like covering closing or home repair costs. "Homebuyers and real estate investors in markets with a sizeable inventory of unsold homes might be in a good position to negotiate and land a deal," said Brett Hively, Senior Vice President of Mortgage, Finance, and Strategy at Ameris Bancorp. "These conditions can lead to more favorable pricing and perks for buyers." In April 2025, less than one-third of homes sold exceeded their asking price, the lowest April share in five years.²

Factors Contributing to Excess Housing Inventory

Excess housing inventory can occur due to a multitude of factors. Homeowners sell for various reasons, such as relocating for a job, downsizing, or upgrading to a larger home. Economic factors, such as rising interest rates or a slower economy, may also push them to sell before values drop.

Predictions for Summer

It remains to be seen if this imbalance between supply and demand will continue through summer months. "Should mortgage rates decline, we could see an uptick in homebuying enthusiasm," said Hively. "This has the potential to reduce current inventory levels and set the stage for a more competitive housing landscape." The next Federal Open Market Committee (FOMC) meeting will be on June 17–18, 2025, and suggests a federal funds rate cut is unlikely.³ The federal funds rate indirectly affects interest rates for longer-term loans, such as mortgages.

Sources:
^{1, 2} https://www.nasdaq.com/press-release/redfin-reports-spring-homebuying-season-sputters-supply-jumps-5-year-high-existing
³ https://www.bloomberg.com/news/articles/2025-05-19/williams-says-fed-needs-beyond-june-july-to-get-clearer-outlook


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Ameris Bank is not affiliated with nor endorses Nasdaq or Bloomberg.