After years of soaring prices and fierce bidding wars, something unusual is happening in the U.S. housing market: in many cities, the number of homes for sale is climbing rapidly—yet buyers are staying on the sidelines.
In cities like Seattle, Austin, and Denver, housing inventory has bounced back strongly. According to Realtor.com’s latest data, Seattle now has over 50% more homes on the market than it did in 2019, before the COVID-19 pandemic. In Denver, the supply has doubled. In fact, 22 out of the 50 largest metro areas now have more available homes than they did pre-pandemic.
But here’s the twist: prices haven’t really dropped.
In May, the national median listing price held steady at $440,000—unchanged from a year ago. Nearly 19% of sellers lowered their asking prices, the highest share of price cuts since 2016, but that’s still a small portion of the overall market. For many Americans, homes are still just too expensive.
Take Steve and Lindsey, a young couple living in Brooklyn. They had hoped to buy their first home this spring. “We thought prices might come down after COVID,” Steve said. “Inventory is up, but prices haven’t really budged—and with mortgage rates where they are, we’ve decided to wait.” Their story echoes what many would-be buyers are feeling: more homes on the market, but little relief when it comes to affordability.
Nationwide, housing inventory in May was more than 30% higher than a year ago, marking the 19th consecutive month of growth. Still, supply remains below historical norms. Danielle Hale, Chief Economist at Realtor.com, says the shift is a sign that the market is slowly rebalancing after years of wild price growth.
“In some areas, affordability challenges have pushed buyers out of the market, giving inventory space to build up,” Hale said. “We’re seeing the strongest rebounds in metros that have been more active in new construction over the last six years.”
Despite the rising inventory, the U.S. housing market remains short of the 6-month supply benchmark that typically defines a buyer’s market. Right now, the national supply stands at about 4.6 months.
The real issue is that homes are “piling up” in some areas. Buyers, squeezed by high mortgage rates—hovering around 7% in May—are either stepping back or lowering their price ceilings. Meanwhile, sellers are reluctant to adjust their expectations. It’s a standoff.
Heather, a retired schoolteacher in the Boston suburbs, listed her home in January. By June, it was still on the market. “I expected it to move fast,” she said. “But we’ve had fewer showings than we thought. I may have to rethink the price.”
This disconnect is creating uneven conditions across the country. Some cities—like Phoenix and Raleigh—are seeing homes sit longer and sellers become more flexible. Others, like Miami and Chicago, continue to face tight inventory due to slower construction and high demand.
Interestingly, while some homebuilders are responding to the inventory buildup by accelerating construction, others remain cautious. Hale notes that this divergence reflects deeper issues in housing policy and regional growth trends. “This moment highlights the importance of supporting housing development,” she said, “as well as the growing divide between markets that are normalizing and those still stuck with low supply.”
And the sales numbers? They’re not encouraging. May saw a 2.5% drop in home sales year-over-year, despite the higher number of listings. High borrowing costs are one big reason. Many buyers simply can’t make the math work anymore.
For buyers who can afford to wait, this might not be the worst time to sit tight. Sellers are adjusting, slowly but surely. The days of 20 offers in 24 hours may be fading in many markets, especially as sellers grow tired of waiting and begin to lower prices.
As Steve put it, “We’re not expecting a crash—but at least we’re not lining up at 5 a.m. to tour a condo anymore.”
Ultimately, America’s housing market is entering a new phase. It’s not a buyer’s paradise just yet, but it’s also no longer a seller’s dreamland. For now, it’s something in between—a slow dance between supply and demand, with both sides eyeing the exit signs.