Will housing inventory rise in 2025? Experts weigh in

The housing market is challenging right now. Home prices are in a seemingly constant climb, mortgage rates remain stubbornly high (at least compared to rates a few years ago), and overall housing inventory remains woefully low, which only compounds the problem.

When inventory is low, buyers are forced to compete for the limited homes that are out there, driving up prices and making homeownership less attainable across the board. Throw in high rates and the challenge gets steeper.

"We can't have a stable housing market without new inventory," says Douglas Wagner, director of brokerage services at BOND New York Properties. "If inventory levels remain low, prices will continue to stay high, even with some properties languishing on the market for many months. The lower the inventory, the higher the competition."

Still, housing inventory has been low for years. Could 2025 be when things finally turn around? We asked some experts to weigh in on the potential scenarios.

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Will housing inventory rise in 2025?

Here's how housing inventory may change in the new year, according to the experts we spoke with:

Housing inventory will increase in 2025

Many real estate professionals expect a rise in housing inventory in 2025.

"Both buyers and sellers have been on the sidelines lately — buyers because of high rates and sellers holding off because those buyers aren't biting," says Clint Jordan, a real estate agent with Keller Williams Partners and founder of 719 Veterans Home Team. 

Jordan is right: High interest rates have been a problem in recent years — both for buyers and sellers. At one point in 2023, they reached nearly 8% — the highest point in decades.

Fortunately, the Federal Reserve began cutting interest rates at the end of 2024, and many expect it will spell more stable mortgage rates (not necessarily lower ones) on the horizon. This, experts say, could inspire more sellers to get into the market. 

"Inventory trends are going to depend heavily on a few key factors, and interest rates are the big one," Jordan says. "Lower rates should encourage buyers to jump back in. As rates stabilize and both groups re-enter the market, we're expecting to see a noticeable increase in listings."

Anecdotally, Dana Bull, a real estate consultant and agent with Compass, says she's already seeing more interest in selling this year than she has in years past. 

"I have somewhere between 15 and 18 sellers who are thinking about listing this spring, which is the most that I've ever had going into the new year," Bull says. "What's been going on is most of these people have been considering selling for the past 18 months, but they've been in this holding pattern and wanting to wait and see what is going on with interest rates. At this point, they're not deciding that they cannot wait for external factors to be optimized, and they need to make their move. I think we will see a decent-sized uptick in inventory — nothing too crazy, but people are getting off the fence."

The bulk of 2025's inventory, Bull says, will likely come from homeowners who need to sell — not those who have the luxury of right-timing their sale. This includes people divorcing, moving for new jobs, having kids, getting married and chasing other "significant lifestyle milestones," Bull says. 

"They don't want to put their lives on hold based on outside factors," she says. "They need to make a decision based on what's going on with them."

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Housing inventory may not rise enough, though

The question is whether inventory will rise enough to make things easier for buyers. For one, inventory has been extremely low for years — so there's a lot of ground to make up. 

"Just as there has been pent-up supply from owners who have waited out the market over the past 2.5 years, there is pent-up demand from would-be buyers who have not yet entered the market," Wagner says. "There will be a period of frenzy when inventory levels finally increase, and new buyers rush into the market."

There's also the chance that mortgage rates fall, causing even more demand from buyers. This could bump prices even higher and make things challenging, too.

"If interest rates drop and the influx of buyers outpaces the rise in inventory, we could see a return to bidding wars," Jordan says. "This would give sellers the upper hand again."

The bottom line

Keep in mind that housing market conditions vary widely from city to city, so make sure to speak to a real estate agent in your area if you're considering buying or selling. They can help you understand the specific conditions that exist in your market — and help you strategize how to best traverse those.