Is housing inventory too high? Is it too low? Is it a good time to buy? A bad time? Are you planning to buy a home in 2025, but on the fence about whether it’s a good idea?

The housing market is, in a word, confusing. The answers to these questions are pretty varied, depending on who you ask or where you look, so I’d (me, John Meussner here!) like to shed some light on details that may help clear things up for you.

Recently, mainstream media came out with some housing articles focused on how much residential real estate inventory on the market has climbed in recent months. CNBC’s Diana Olick (who has been preaching how bad of a time it is to buy a house since….2012….yes, really – and somehow, she still has a platform) went so far recently to note a “worrying supply trend”. The supply trend the media is pointing to is largely referencing an increase in days on market, along with a spike in total inventory numbers year over year, with inventory climbing 12% according to Redfin.

And if you look at the inventory numbers in a vacuum of 2021-present, you might see a worrying trend, too – in fact, inventory IS up 12% year over year, and if you take just that data and consider supply & demand, it wouldn’t be a stupid assumption to believe home prices may need to come down. However, when we look at historical home inventory numbers, it’s easy to see that while inventory HAS spiked recently, it’s still WELL BELOW pre-pandemic levels, while demand for housing (based on age, population, and income demographics) is still high, with that trend expected to continue for the foreseeable future.

So with demand high, and supply STILL constrained (compared to 2019 and the prior years going back to 2013), the much more likely scenario is that home prices will continue to climb modestly in most markets across the US – in fact, the most recent Case-Shiller appreciation index showed year over year increases between 3-4% for home values, and that’s despite affordability challenges and persistently elevated mortgage rates.

Every market in the US is different and our team works in many markets across the country, so it’s important to understand what’s happening locally, but on a national scale, we have seen and expect to see home values continue to rise, interest rates to steadily (though perhaps painfully slowly) decline, and for inventory to continue to remain a challenge, pressuring home prices upward- a trend that could quickly accelerate if interest rate decreases accelerate (very possible if we run into any unforeseen economic weakness or geopolitical turmoil).

While inventory has climbed year over year, I wouldn’t call it a worrying supply trend. In fact, I’d argue the worry should be that we still don’t have enough housing, and not enough has changed to make building easier – in many desirable metro areas, strict zoning, building, and environmental codes make it extremely difficult and expensive to build new homes, and with so many homeowners still “locked in” to the low interest rates from 2020 and 2021, the home resale market is also likely to remain slow.

Based on this data and market expectations, I’d argue that if you’re considering buying a home in 2025 and the monthly payment would be within your comfort level (or close) in terms of affordability, you should make the leap into home ownership, especially if you’re thinking long term – we should see home values trend up in most markets for the foreseeable future, and it’s likely interest rates will come down, so you’ll very likely have an opportunity to build your net worth (through home appreciation) while seeing increased monthly cash flow (through a future refinance opportunity) – both being keys to long term financial security.