Homebuilder unsold completed inventory sits at a 16-year high: Housing markets to find deals in

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Most of America’s largest homebuilders have publicly stated that the peak 2025 housing market saw softer-than-expected conditions, particularly in many parts of the Sun Belt.

This softer housing market environment is causing unsold inventory to tick up. Indeed, since the Pandemic Housing Boom fizzled out, the number of unsold completed U.S. new single-family homes has been rising:

July 2016 —> 58,000

July 2017 —> 65,000

July 2018 —> 65,000

July 2019 —> 80,000

July 2020 —> 58,000

July 2021 —> 34,000

July 2022 —> 38,000

July 2023 —> 70,000

July 2024 —> 103,000

July 2025 —> 121,000

The July figure (121,000 unsold completed new homes) published last week is the highest level since July 2009 (126,000).

Let’s take a closer look at the data to better understand what this could mean.

To put the number of unsold completed new single-family homes into historic context, we have ResiClub’s Finished Homes Supply Index.

The index is one simple calculation: The number of unsold completed U.S. new single-family homes divided by the annualized rate of U.S. single-family housing starts. A higher index score indicates a softer national new construction market with greater supply slack, while a lower index score signifies a tighter new construction market with less supply slack.

If you look at unsold completed single-family new builds as a share of single-family housing starts (see chart below), it still shows we've gained slack (and have more now than pre-pandemic 2019); however, this slack, nationally speaking, isn’t anything close to the 2007/2008 weakening.

While the U.S. Census Bureau doesn't give us a greater market-by-market breakdown on these unsold new builds, we have a good idea where they are based on total active inventory homes for sale (including existing)—likely much of it is in the Mountain West and Sun Belt, particularly around the Gulf.

Indeed, some builders are experiencing pricing pressure, particularly in major markets like Florida and Texas, where resale inventory is well above pre-pandemic 2019 levels.

While there has been an increase in slack in the new construction market, U.S. new home sales have only fallen a little.

The total U.S. new home sales in July 2025 (56,000) were down -8.1% compared to July 2024 (61,000). [Keep in mind that new home sales data has a large margin error].

Why aren’t new home sales significantly lower this spring, despite national homebuilders, on an aggregate basis, facing their softest spring/summer market of the past decade?

It boils down to the fact that many homebuilders have done larger affordability adjustments—including everything from bigger buydowns, more money back at close, and even outright price cuts—in order to keep moving product. Those adjustments in many markets have been enough to prevent a bigger pullback.

The most aggressive homebuilder on the incentive front is Lennar.

Last quarter, Lennar spent the equivalent of 13% of the final sales price on sales incentives, such as rate buydowns. For a $400,000 home, that translates to $52,000 in incentives. According to John Burns Research and Consulting [see their historical chart here], that’s the highest incentive level Lennar has offered since 2009—and it’s significantly higher than Lennar’s cycle low in Q2 2022, when it spent 1.5% of the final sales price on sales incentives.

In order to do bigger incentives, homebuilders are compressing margins.

Indeed, all 11 of the major publicly traded U.S. homebuilders that ResiClub tracks saw year-over-year gross margin compression between Q2 2024 and Q2 2025.

While homebuilder margins have compressed from the highs of the Pandemic Housing Boom, some look alright compared to pre-pandemic 2019 levels.

However, if resale inventory and unsold completed new-build inventory continues to rise—and further margin compression becomes necessary—we could reach a point where single-family permit and housing starts activity pulls back more sharply. We’ll keep a close eye on it.

Big picture: There’s greater slack in the new construction market now than a few years ago, giving buyers and investors some leverage in certain markets to negotiate better deals with homebuilders. That could explain why this month Lennar launched the Lennar Investor Marketplace. 

Over the past week, ResiClub PRO members got these 3 additional housing research articles:

We’re 3 years into the mortgage industry’s dual drought

What homebuilder margin compression tells us about the housing market

Consumer prices and weekly wages up 25% since 2020—U.S. home prices are up 46%

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