Why Are More Homes Sitting on the Market?
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Home inventory is climbing, but it is not because sellers are suddenly flooding the market. The bigger issue is that buyers are not moving fast enough to absorb the homes already listed.
In August, the number of active listings was up 3.6% from a year ago — the fastest annual growth rate so far this year. New listings, however, were essentially flat, down 0.1%. That tells us inventory is building because homes are taking longer to get under contract, not because significantly more owners are deciding to sell. Even with the increase, national inventory remains roughly 11% below typical pre-pandemic levels.
So what is holding the market back?
1. The monthly payment is still too high
Mortgage rates remain in the mid-6% range. Add today’s prices, property taxes and rising insurance costs, and the payment simply does not work for many buyers.
Some people can qualify but do not like the payment. Others are waiting for rates or prices to improve. Either way, fewer buyers means more homes sitting on the market.
2. Buyers can afford to be picky
Buyers have more choices than they did a few years ago. They are taking their time, comparing properties and passing on homes that need too much work or appear overpriced.
August contract signings were down 3.7% from a year earlier, the second straight monthly drop. Meanwhile, 20.4% of active listings — about one in five — carried a price reduction, and the median home sat 60 days on market.
3. Sellers are staying on the market longer
Last year, many frustrated sellers simply pulled their homes off the market. This year, more are staying listed and waiting — or cutting the price.
That is helping inventory grow, even though the number of new listings has barely changed.
4. Builders have homes they need to move
Builders are competing for the same cautious buyers. At the end of July, the new-home market had about 9.6 months of supply. That is a lot of inventory at the current sales pace.
As a result, builders are offering price reductions, closing-cost assistance and mortgage-rate buydowns — concessions that do not appear in list-price comps but do appear at closing.
What needs to happen before sales pick up
- Buyers need a more affordable payment. That could come from lower rates, lower prices, higher incomes or reduced insurance and tax costs.
- Sellers need to adjust to today’s market. Homes that are priced correctly and in good condition are still selling. Homes priced for yesterday’s market are sitting.
- Buyers need more confidence. Stable jobs, less uncertainty and a clearer direction for mortgage rates would encourage more people to move forward.
What this means for real estate investors
There are deals in this market, but investors have to look harder and make more offers.
Start with properties that have been listed for 60 days or more, experienced several price reductions, fallen out of contract or been temporarily withdrawn. These sellers may be more open to an investor offer — especially one that provides certainty.
Builders are also worth approaching. Ask about completed homes, canceled contracts, discontinued models and properties they would like off their books before month-end or quarter-end.
Other sources include:
- Property managers who know tired landlords
- Probate and inherited properties
- Absentee owners
- Tax-delinquent or code-violation properties
- Bank-owned homes and auctions
- Local agents with stale or difficult listings
- Wholesalers with properly documented contracts
Getting the deal under contract is not always about offering the highest price. Investors can compete by providing proof of funds, closing when promised, purchasing as-is and giving the seller flexibility on the closing or move-out date.
Most importantly, stay disciplined. Use current rents, realistic repair estimates and the actual costs of taxes, insurance, vacancy, maintenance and financing. Decide on your maximum price before negotiating — and be willing to walk away.
There is more inventory, but that does not automatically make every property a good deal. The opportunity belongs to investors who make consistent offers, solve real seller problems and refuse to force the numbers.
Run the numbers before you write the offer
Put the purchase price, repair budget and expected resale or rent into the calculator and see what the deal actually supports. If you want a second set of eyes on it — comps, repair scope, exit pricing — send it over.
Sources
- August 2026 Monthly Housing Trends — Realtor.com. Active listings, new listings, pending sales, price reductions and days on market.
- Existing-Home Sales Report — National Association of Realtors. Existing-home sales, prices and available inventory.
- Current Mortgage Rates — Freddie Mac. Average 30-year and 15-year fixed mortgage rates.
- New Residential Sales — U.S. Census Bureau and HUD. New-home sales, builder inventory, prices and months of supply.
- Housing Affordability — National Association of Home Builders. The share of household income required to purchase new and existing homes.
- Builder Confidence and Sales Incentives — NAHB. Builder price reductions, mortgage-rate buydowns and other incentives.
- The Lock-In Effect of Rising Mortgage Rates — Federal Housing Finance Agency. Research explaining how low existing mortgage rates discourage homeowners from selling.
Investment-property financing is subject to underwriting, lender approval, appraisal or alternative valuation, title work, and a complete borrower file. Program terms described here reflect currently available structures and vary by property, borrower, and location. Nothing here is a commitment to lend.