For the past two years, housing market watchers have pinned their hopes on rising inventory. More homes for sale, the thinking went, would ease the crushing competition that has priced millions of Americans out of homeownership. And for a while, the data cooperated—inventory surged through 2025, offering a glimmer of relief.

But as we enter the crucial spring selling season, that progress is stalling. Housing inventory growth has slowed dramatically from 33% year-over-year in mid-2025 to just 10% today. New listings totaled only 39,007 for the week ending January 9—down 12.6% from the same period last year. The math is simple but sobering: if sellers aren't listing homes, buyers can't buy them.

Understanding the Slowdown

Several factors are combining to keep inventory growth in check:

The Lock-In Effect Persists

Approximately two-thirds of mortgaged homeowners have rates below 4%, according to Redfin analysis. For these owners, selling means trading a 3.5% mortgage for one closer to 6%—a monthly payment increase that can exceed $1,000 on a median-priced home. Until rates fall significantly further, many potential sellers will stay put.

Seasonal Patterns Returning

For the first time since the pandemic, normal seasonal patterns are reasserting themselves. Inventory typically declines between Thanksgiving and Presidents' Day as sellers wait for spring. After several years of unusual pandemic-driven patterns, this return to normalcy is actually a sign of market health—but it means fewer homes available right now.

Builder Caution

New construction, which provided much of 2025's inventory relief, is pulling back. The National Association of Home Builders confidence index fell to 37 in January—the 21st consecutive month in negative territory. Builders cite elevated material costs, labor shortages, and tariff uncertainty as reasons for restraint.

Regional Variations Tell the Story

The national numbers mask significant regional differences:

South and West: More Balance

Markets in Texas, Florida, Arizona, and other Sun Belt states have seen genuine inventory improvements. New construction has kept pace with demand, and price growth has moderated. Buyers in these markets have more choices and negotiating power than they've had in years.

Northeast and Midwest: Still Tight

Legacy housing stock in the Northeast and Midwest continues to face severe inventory constraints. Older homeowners in these regions are less likely to move, and new construction is limited by zoning restrictions and land costs. Prices have continued rising even as other markets cool.

Pacific Markets: Mixed Signals

California markets show particular complexity. Inventory has improved from extreme lows, but remains far below pre-pandemic norms. Seattle, by contrast, has returned to what analysts describe as a "functional market" with balanced supply and demand.

What Spring Buyers Should Expect

The slowing inventory growth has practical implications for those hoping to buy in the coming months:

Competition May Intensify

While not returning to the frenzy of 2021-2022, spring 2026 could see increased competition as more buyers enter a market with fewer available homes. Multiple offers and quick sales may become more common, particularly for well-priced properties.

Prices Likely to Hold

The inventory shortage supports home prices. CoreLogic data shows prices rose 1% year-over-year nationally, and the constraint on supply makes significant price declines unlikely in most markets. Buyers hoping for major discounts may be disappointed.

Timing Matters More

With fewer homes available, the best properties will move quickly. Buyers should have financing lined up, know their priorities, and be prepared to act decisively when the right home appears.

The Affordability Math

Despite some improvement, affordability remains challenging:

  • Median home price: $387,000 (national)
  • Median monthly payment: $2,413 (including taxes and insurance)
  • Required income for median home: Approximately $97,000 (at 30% debt-to-income ratio)
  • Median household income: Approximately $80,000

The gap between required and actual income remains the fundamental constraint on housing demand. Even with modestly lower mortgage rates, many households simply cannot afford current prices.

What Could Change the Picture

Several developments could improve inventory conditions:

Further Rate Declines

If mortgage rates fall into the low 5% range, more locked-in homeowners might be willing to sell. The current 6.06% rate, while lower than 2025 peaks, hasn't been enough to unlock significant seller activity.

New Construction Surge

A meaningful increase in homebuilding could add supply regardless of existing homeowner behavior. However, builders face constraints that make rapid expansion difficult.

Economic Stress

Recession or significant job losses could force some homeowners to sell regardless of their mortgage rate. This would be a grim path to improved affordability.

Policy Changes

Proposals to reduce building restrictions, incentivize downsizing, or otherwise encourage housing supply could gradually improve conditions—but such changes typically take years to impact the market.

Advice for Spring 2026 Buyers

Given current conditions, prospective buyers should:

  • Get pre-approved now: Having financing in place lets you move quickly when you find the right home
  • Expand your search: Consider neighborhoods or home types you might have overlooked
  • Be realistic on price: Hoping for major price declines may mean waiting indefinitely
  • Watch new construction: Builder incentives can make new homes competitive with existing inventory
  • Consider the rate environment: If rates fall, competition will intensify—acting sooner may be better

The Structural Challenge

Beyond cyclical factors, the housing market faces a structural deficit. Years of underbuilding, demographic demand from millennials reaching prime home-buying age, and geographic concentration of jobs in high-cost areas have created a mismatch between supply and demand that won't resolve quickly.

For spring 2026 buyers, the message is clear: while conditions have improved from the most extreme seller's market in history, the housing market remains challenging. Patience, preparation, and realistic expectations will be essential for navigating the months ahead.