If you’ve been searching for a home lately, you may have noticed that inventory isn’t growing as quickly as it was before. That can make it easy to worry that there simply won’t be enough options when you’re ready to buy. But there’s another side to the story.
Even though inventory growth has slowed, the number of homes for sale has continued to increase. And there’s a surprising factor that could help that trend continue: mortgage rates staying higher for longer.
According to Realtor.com, active listings were up 2.1% year-over-year in July. That’s a much slower pace than earlier in the year, when inventory was up 10% in January and 31.5% in May 2025.
Still, slower growth doesn’t mean inventory is disappearing.
Homes are continuing to come onto the market, and the numbers have shown more stability over the past few months. That’s important for buyers because even a slower increase means the pool of available homes is still expanding. So if you’ve been worried that your options are shrinking, the bigger picture is more encouraging than it may seem.
The improvement becomes even clearer when you compare today's inventory with the extremely low levels seen in 2021.
The number of homes for sale has now increased year-over-year for 33 consecutive months, and inventory has nearly doubled compared with those recent lows. July was also the strongest July for inventory since 2019.
The market still needs additional listings to fully return to pre-pandemic levels, but supply is moving much closer to normal. That gives today's buyers something they haven't had enough of in recent years: choice.
More available homes can mean more time to compare properties, less pressure to make an offer immediately, and potentially more room to negotiate.
It may sound counterintuitive, but mortgage rates and housing inventory can move together.
When rates rise or remain elevated, some homeowners who have locked in very low mortgage rates may become more willing to sell rather than wait indefinitely for rates to fall. As Compass Chief Economist Mike Simonsen has explained, periods of higher rates have historically been associated with increases in inventory.
And rates are expected to remain in the mid-to-upper 6% range for some time. Realtor.com’s latest forecast projects inventory to finish 2026 up 3.6% year-over-year, with supply potentially reaching levels similar to the end of 2019.
For buyers, that could be a positive development.
Higher rates aren't ideal, but if they contribute to more homes coming onto the market, buyers may gain something equally valuable: more choices and less competition.
Bottom Line
Housing inventory may not be growing as quickly as it was, but the overall trend is still moving in a better direction for buyers. More homes are available today than in recent years, and supply could continue improving through the rest of 2026.
🏠 Want to know what’s available in our area? Let’s take a look together.
