You might’ve heard there are more homes for sale right now than we’ve seen in a while. And if you’re wondering whether that means we’re headed for another housing market crash, you’re not alone.

 

But the truth is, the numbers just don’t back that up. In most places, having more homes on the market isn’t a bad thing—it’s actually a sign that things are settling into a more balanced and healthy market.

 

According to the latest numbers from Realtor.com, the number of homes for sale just hit its highest level since 2020—you can see that in the white line on the graph below.

 

But here’s something to keep in mind—while inventory is up, it still hasn’t made it back to the typical levels we saw before the pandemic (that’s what the gray line shows):

 

 

That means there are more homes on the market now than we’ve seen in a while.

 

And yes, it’s true—there are definitely more homes for sale now than we’ve seen in the past few years. But we’re still well below what’s considered normal, and that’s an important piece of the puzzle to keep in mind.

 

When some folks hear that inventory’s going up, their minds jump straight to 2008—since back then, a big spike in homes for sale happened right before the market crashed. But what’s happening today is a completely different story.

 

Here’s the big thing to understand: we’re not dealing with too many homes on the market—we’re actually still trying to catch up. There’s been a major housing shortage for years, and we’re still working our way out of it.

 

Take a look at the red bars in the graph below—they represent the years since 2012 when new home construction didn’t keep pace with the number of new households forming. The deeper the bars, the bigger the gap grew between supply and demand.

 

 

One of the big reasons this shortage has gotten worse is that new home construction just hasn’t kept up with the growing number of people looking to buy. In fact, the U.S. is now short by millions of homes—and closing that gap is going to take time. As Realtor.com puts it:

 

 

So, in most places, there’s really no risk of having too many homes for sale right now. In fact, it’s just the opposite—most markets still need a lot more homes to meet demand.

 

That’s why, even though inventory is going up, it’s not a big issue nationwide. It’s really just starting to close a gap that’s been building for years.

 

Don’t let the headlines freak you out. More homes for sale doesn’t mean a crash is coming—it actually means we’re moving toward a more balanced, steady housing market.