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According to U.S. Census Bureau data, U.S. homebuilders have 266,000 homes under construction and ready to sell, the second highest level since records began, behind the 2008 housing bubble.
The surge in construction comes as speculative “spec” homes – built without committed buyers – reached 124,000 units nationwide, up from shortage levels seen between 2012 and 2022. Inventory last time of speculative homes increased, it was in 2008, when builders reported 199,000 units.
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“Builders are doing their part to flood the housing market with supply,” said Nick Gerli, CEO of real estate data platform Reventure App.
The construction boom is concentrated in the southern states, where manufacturers keep most of their inventory. Texas, Florida and Tennessee are reporting an overflow of available housing on builders’ lots. Active listings in these areas have returned to pre-pandemic levels, ending the local housing shortage.
Meanwhile, the Northeast and Midwest continue to face inventory shortfalls compared to pre-pandemic levels. Builders largely avoided these regions, concentrating construction in the New South and Mountain West.
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“Home builders in these areas allowed many homes to be built during the pandemic boom and will continue to permit homes in late 2024, even as buyer demand has cooled,” Gerli told Newsweek. “Texas, Florida, Arizona, Tennessee and Georgia are the states most affected by rising builder inventories.”
According to Redfin data, the median home sales price reached $430,010 in November, up 5.4% from a year earlier. The total number of homes for sale increased 10.3% year-over-year to 1,689,082 units, while sales volume increased 4.4%.
Reventure forecasts declining housing prices in Texas and Florida for 2025, with potential price declines concentrated in suburban and rural areas where builders remain most active.
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The Senate Budget Committee recently warned of broader market risks. A new committee report points to rising insurance premiums combined with rising house prices and mortgage rates as potential triggers for market instability.
