According to data from the U.S. Census Bureau, U.S. homebuilders currently have 266,000 homes under construction and ready for sale, marking the second-highest level on record since data tracking began. Only the 2008 housing bubble had higher numbers.

The surge in construction is largely driven by speculative homes, or “spec” homes, which are built without committed buyers. Currently, there are 124,000 spec homes nationwide, significantly higher than the shortage levels between 2012 and 2022. The last time spec home inventory was higher was in 2008, with 199,000 units reported.

“Builders are doing their part to inundate the housing market with supply,” said Nick Gerli, CEO of Reventure App, a real estate data platform.

The construction boom is primarily occurring in southern states such as Texas, Florida, and Tennessee, where builders are maintaining large inventories. These states have seen a return to pre-pandemic active listing levels, effectively ending local housing shortages. However, the Northeast and Midwest are still facing inventory deficits compared to pre-pandemic levels. Builders have largely avoided these areas, focusing their efforts on the South and Mountain West regions.

“Homebuilders in these areas permitted lots of homes during the pandemic boom and continue to permit homes in late 2024, even as buyer demand has cooled,” Gerli stated. “Texas, Florida, Arizona, Tennessee, and Georgia are the most impacted states by the run-up in builder inventory.”

According to Redfin data, the median home sale price reached $430,010 in November, marking a 5.4% increase year-over-year. Total homes for sale rose by 10.3% from the previous year, amounting to 1,689,082 units. Sales volume grew by 4.4%.

Reventure forecasts potential home price declines in Texas and Florida for 2025, especially in suburban and rural areas where builders remain most active.