Market Perspective
More Homes May Be Coming to Market — And That Could Be Good News for Buyers
Inventory growth has cooled, but the bigger picture may be more encouraging than it first appears.
For much of the past several years, buyers have been hearing the same story: not enough homes, too much competition, and very little room to be selective.
That narrative is beginning to change.
While the pace of inventory growth has slowed in recent months, the bigger picture is still encouraging. More homes are available today than there were a year ago, and the market continues to move closer to the more balanced conditions buyers were accustomed to before the pandemic.
For anyone considering a purchase in the months ahead, that could mean something very simple: more opportunity.
The pace of inventory growth may have changed, but the direction has not.
A Market in Transition
Inventory Growth Is Slowing, Not Reversing
According to Realtor.com, the number of active listings nationwide was up 2.1% year-over-year in July.
That is a much smaller increase than buyers saw earlier in the housing recovery. Inventory was growing by roughly 10% at the beginning of the year, and in May 2025, the annual increase was more than 30%.
At first glance, that slowdown may sound concerning.
But there is an important distinction: inventory is still growing.
The market simply is not adding supply at the dramatic pace it was when it was climbing back from historically low levels.
Over the past several months, inventory growth has also settled into a more consistent range. That stability may be an early indication that the slowdown is beginning to level out rather than disappear altogether.
Year-over-year growth in active listings has slowed considerably, but remains positive.
Buyers Have More Choices Than They’ve Had in Years
It is also worth putting today’s inventory numbers into perspective.
The housing market has now recorded year-over-year inventory gains for 33 consecutive months, according to Realtor.com. Compared with the extremely limited supply buyers faced in 2021, the number of homes available has increased significantly.
In fact, July 2026 marked the strongest July for housing inventory since 2019.
That is an important milestone. The market has not fully returned to pre-pandemic inventory levels yet, but it is getting considerably closer.
In other words, today’s buyer is navigating a very different landscape than the buyer who entered the market several years ago.
July 2026 recorded the highest level of active housing inventory for the month since 2019.
What Buyers Are Gaining
There may still be competition for exceptional homes, but buyers are increasingly gaining something they have not had much of recently: choice.
The Unexpected Role Mortgage Rates Are Playing
Interestingly, mortgage rates may be one of the reasons inventory continues to rebuild.
Housing economists have pointed to a relationship between rates and available supply. When mortgage rates remain elevated, buyer demand can soften, allowing homes to stay on the market longer and inventory to accumulate. When rates fall, demand can return quickly and absorb that available supply.
That dynamic could become especially relevant throughout the remainder of 2026. Mortgage rates are expected to remain elevated for the time being, while Realtor.com currently projects housing inventory will finish the year higher than it was at the end of 2025.
And while higher borrowing costs are certainly not something buyers celebrate, there can be an upside: a market with more inventory can create a very different buying experience.
The Buyer Advantage
More inventory can mean more breathing room.
• More homes to compare before making a decision
• More time to evaluate a property carefully
• Greater negotiating leverage in certain situations
• Fewer scenarios where buyers feel pressured to make an immediate decision
Of course, that does not mean every home will suddenly become negotiable.
Beautifully presented, well-priced properties in desirable locations can still attract significant attention — particularly in markets where quality inventory remains limited.
But the broader shift gives buyers something incredibly valuable: room to make a more thoughtful decision.
Closer to Home
What This Could Mean for Southern California Buyers
Real estate is always local.
National inventory statistics provide important context, but individual markets across Southern California can behave very differently from one neighborhood to another.
A luxury estate in Hidden Hills, a family home in Woodland Hills, a coastal property in Malibu, and a residence elsewhere in the San Fernando Valley may each experience entirely different levels of demand, competition, and negotiating leverage.
That is why simply asking whether the market is a “buyer’s market” or a “seller’s market” often does not tell the full story.
The more useful questions are:
How much inventory exists in the neighborhood you are considering?
How long are comparable homes staying on the market?
Are sellers reducing prices?
Are properties still receiving multiple offers?
And where do buyers actually have room to negotiate?
More Inventory Means More Possibility
For buyers who have been waiting on the sidelines because they were frustrated by limited options, the current market deserves another look.
Inventory growth may no longer be making the dramatic jumps it did during the early stages of the housing recovery, but supply continues to improve.
And compared with just a few years ago, buyers have considerably more to choose from.
That could create one of the more interesting buying environments we have seen in some time — one where patience, preparation, and strong negotiation matter just as much as speed.
The Frontgate Perspective
The best opportunities rarely require a perfect market.
They come from understanding the market you are in and recognizing when the right property, the right price, and the right negotiating position align.
With inventory continuing to rebuild and buyers gaining more options, the remainder of 2026 may create opportunities that simply were not available during the highly competitive markets of recent years.
Thinking about making a move?
The Frontgate team can help you understand what is happening in your specific neighborhood, identify where opportunities are emerging, and create a strategy around your goals.
