New Construction Inventory: Why This Isn’t 2008 All Over Again

You may have seen the headlines or chatter online saying new home inventory is at its highest level since the housing crash. And if you lived through 2008, hearing that new construction is climbing again might feel a little unsettling.

But here’s the thing — not everything you read online gives you the full picture. A lot of those headlines are written to grab attention, not to give clarity. When you take a closer look at the data, the story looks very different (and much less scary).

Why This Isn’t Like 2008

Yes, it’s true — the number of new homes on the market has reached its highest level since the crash. But here’s the important distinction: saying we’re near 2008 levels for new construction is not the same thing as having the massive inventory surplus we saw back then.

That’s because new builds are only one piece of the puzzle. To really understand the housing market, we have to look at all inventory — both new construction and existing homes (the ones that have already been lived in and are being resold).

When you combine those two numbers, today’s overall supply looks very different compared to the glut of homes we saw during the crash. In other words, while new construction is up, it doesn’t mean we’re headed for another 2008.

(See graph below for a visual comparison.)

Builders Have Actually Under-built for Over a Decade

Here’s another important perspective you won’t get from those clickbait headlines: after the 2008 crash, builders hit the brakes hard. For nearly 15 years, they didn’t build enough homes to keep up with population growth and demand.

That long period of under-building created the housing shortage we’re still experiencing today. So while today’s new construction numbers look high in isolation, they’re really a necessary part of catching up after years of not building enough.

The graph below, based on Census data, shows this clearly — the red bars highlight the overbuilding that happened leading up to the crash, while the orange bars represent the long stretch of under-building that followed:

The Road Ahead

Basically, we had more than 15 straight years of under-building – and we’re only recently starting to slowly climb out of that hole. But there’s still a long way to go (even with the growth we’ve seen lately). Experts at Realtor.com say it would take roughly 7.5 years of building at today’s pace just to close the gap.

Of course, like anything else in real estate, the balance of supply and demand varies by market. Some areas may have more homes for sale, while others may have far fewer. But on a national scale, this is not like the last time.

Bottom Line

Just because there are more new homes for sale right now, it doesn’t mean we’re headed for a crash. The data shows today’s overall inventory situation is very different.

If you have questions about what builders are doing here in our local market, or if you’re curious how this impacts your plans to buy or sell, let’s connect. I’d love to share insights specific to our area and help you navigate your next move with confidence.