I’ve been watching the U.S. housing market shift gears in real time, and this latest data point could be a turning point. Inventory has finally cracked the one million mark for the first time since 2019—and while that might sound like good news for buyers, it’s not the whole story. We’re not in a buyer’s market just yet. But something is changing, and it’s worth paying attention.

Is the Housing Market Entering a New Phase of Balance—Or Just Hitting Pause?

According to Realtor.com’s May Monthly Housing Trends Report, active home listings in the U.S. have officially topped one million—the highest level since pre-pandemic winter 2019. New listings rose 7.2% year over year, with all 50 of the largest U.S. metros reporting inventory gains. However, the market isn’t booming: homes took a median of 51 days to sell, six days longer than last year, and price cuts hit a record high for May, affecting nearly 1 in 5 listings.

My Takeaways: What This Data Really Tells Us

1. We’re Moving Toward Supply-Demand Rebalancing—Slowly

The jump past one million active listings is significant. It reflects a broader market loosening, especially in metro areas that ramped up construction post-2020. When inventory expands faster than demand, prices begin to ease. But it’s uneven: cities like Phoenix are cooling, while others remain hotbeds of competition.

• Why it matters: A more balanced market gives buyers room to negotiate—but also signals that sellers can’t price aggressively without consequence.

2. Price Cuts Are the New Normal in Some Regions

Price reductions were seen in 19.1% of listings, especially in overbuilt areas across the West and South. That’s the highest share for May since at least 2016. In some metros, sellers who overshot the market are adjusting expectations in real time.

• What this signals: We’re entering a stage where listing at the right price from day one becomes essential. The “wait and see” pricing strategy? It’s getting costly.

3. Construction Trends Are Creating a Tale of Two Markets

Chief Economist Danielle Hale hits the nail on the head: construction patterns are shaping local dynamics. Areas that built heavily during the pandemic have more listings and longer time on market. Meanwhile, underbuilt regions remain tight, keeping prices stubbornly high.

• For investors and buyers alike, this is a golden reminder: not all housing markets are created equal. Local supply elasticity makes all the difference.

4. Days on Market Is a Quiet but Telling Indicator

Homes taking longer to sell (now 51 days on average) may not grab headlines, but it’s a sign that buyers aren’t rushing in with urgency—and that sellers are having to be more patient or flexible.

• For real estate pros: This slight softening opens the door for more strategic deal-making, especially in negotiation-savvy buyer segments.

What Should You Do Now? (Reader Guidance)

If you’re a buyer

• Don’t rush—use this moment to shop smart, negotiate harder, and ask for concessions like rate buydowns or closing cost credits.
• Focus on markets with high price-cut rates and increased inventory—there’s more room to negotiate.

If you’re a seller

• Price it right the first time. Look at local comps, not national headlines.
• Prepare for longer days on market, and stay flexible on offers—especially in overbuilt regions.

If you’re an investor

• Target metros where inventory is rising but long-term fundamentals remain strong.
• Watch the spread between listing prices and sold prices to spot undervalued opportunities.

Quick Topic Explainer:

What does “one million active listings” mean—and why is it a big deal?

Active listings are homes currently for sale (excluding pending sales). Crossing the one million mark for the first-time buyers since 2019 signals improved supply, offering more choices for buyers and hinting at a potential shift in market dynamics.

Want to Stay Ahead of These Shifts?

Tech-enabled tools and local market dashboards can help you track price cuts, time-on-market trends, and new inventory in real time. Whether you’re an investor, a buyer, or an agent, data is your friend in this new phase of the cycle.

Reader Q&A: What You Might Be Wondering Next

Are home prices going to crash now that inventory is rising?

Not likely. This is more of a market normalization than a freefall. Prices may soften in specific regions, but widespread crashes are not expected given strong employment and consumer demand.

Which cities are seeing the biggest shift?

Phoenix, parts of Texas, and other metros in the South and West are leading the inventory and price cut trends.

Is now a good time to buy or sell?

 It depends on your local market and your timeline. If you’re buying, more choice and leverage are welcome. If you’re selling, price competitively and plan for longer time on market.