According to U.S. Census Bureau data, U.S. homebuilders have 266,000 houses under construction and ready for sale, the second-highest level since records began, trailing only the 2008 housing bubble.
The construction surge comes as speculative “spec” homes – built without committed buyers – reached 124,000 units nationwide, up from the shortage levels seen between 2012 and 2022. The last time spec home inventory climbed higher was in 2008, when builders reported 199,000 units.
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“Builders are doing their part to inundate the housing market with supply,” said Nick Gerli, real estate data platform Reventure App CEO.
The construction boom centers on southern states, where builders maintain most of their inventory. Texas, Florida and Tennessee report an overflow of available homes on builder lots. Active listings in those regions have returned to pre-pandemic levels, ending local housing shortages.
Meanwhile, the Northeast and Midwest continue facing inventory deficits compared to pre-pandemic levels. Builders have largely avoided these regions, concentrating New South and Mountain West construction.
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“Homebuilders in these areas permitted lots of homes during the pandemic boom and continue to permit homes in late 2024, even as buyer demand has cooled,” Gerli told Newsweek. “Texas, Florida, Arizona, Tennessee and Georgia are the most impacted states by the run-up in builder inventory.”
According to Redfin data, the median home sale price reached $430,010 in November, rising 5.4% from the previous year. Total homes for sale increased 10.3% year-over-year to 1,689,082 units, while sales volume grew 4.4%.
Reventure forecasts home price declines in Texas and Florida for 2025, with potential price drops concentrated in suburban and rural areas where builders remain most active.
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The Senate Budget Committee recently warned about broader market risks. A new report from the committee points to rising insurance premiums combined with elevated home prices and mortgage rates as potential triggers for market instability.
“Property values will eventually fall – just like in 2008 – sending household wealth tumbling. The United States could be looking at a systemic shock to the economy similar to the financial crisis of 2008 – if not greater,” the committee’s report stated.
The inventory surge marks a reversal from 2008-2022 when the U.S. housing market saw construction lag behind population growth. The resulting shortage pushed many first-time buyers out of the market as prices climbed beyond reach.
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