Home inventory 17% below pre-pandemic levels

Realtor.com said in its January housing report, released February 5, that active U.S. home listings were 17.2% below pre-pandemic 2017-2019 norms, even after inventory rose from a year earlier. That shortfall helps explain why many homeowners are renovating instead of moving: fewer homes are available to buy, and borrowing costs remain high. Kiplinger, in a report published August 6, said remodeling demand has held up as owners keep older 3% to 4% mortgage rates and face limited options if they try to trade up. Mortgage data and home-equity loan pricing show the financing backdrop is still expensive for both buyers and remodelers. ### Why does a 17% inventory gap matter to homeowners right now? Realtor.com said the national market was still 17.2% below typical pre-pandemic inventory levels in January, calling it the widest gap since spring 2025. The same report said active listings rose year over year, but the recovery had stalled and 30 of the 50 largest metros had moved backward relative to pre-pandemic norms since May. (realtor.com) That shortage matters because moving is harder when replacement homes are scarce. Kiplinger said there are 17% fewer homes for sale now than before the pandemic, leaving owners with fewer choices if they want to relocate for more space or different features. ### Why are owners staying put instead of listing their homes? Kiplinger said one reason is the mortgage-rate lock-in effect: many existing owners are reluctant to give up loans carrying rates in the 3% to 4% range. (realtor.com) Replacing those loans in today’s market would mean taking on much higher monthly payments, even before accounting for higher home prices in many areas. (finance.yahoo.com) The Mortgage Bankers Association data reported by Bloomberg and CNBC show how large that gap has become. The average U.S. 30-year mortgage rate rose to 6.81% in the latest week, the highest in a year, while total mortgage application volume fell 2.9% week over week and purchase applications dropped 4%. ### If people are not moving, why are renovations holding up? (finance.yahoo.com) Kiplinger said renovations are booming as the housing market stalls because households that would once have moved are instead upgrading the homes they already own. The publication framed that as a response to both low inventory and the cost of replacing an existing mortgage. That pattern fits broader housing data showing a slow market rather than a fully recovered one. (bloomberg.com) Realtor.com said inventory gains had slowed by early 2026, and Redfin described the market as sluggish, with homes taking longer to sell even as some new listings improved. ### How expensive is it to borrow against home equity for a remodel? Yahoo Finance reported that the average adjustable-rate HELOC was 7.23% and the national average fixed-rate home equity loan was 7.36%, citing Curinos data for well-qualified borrowers. (finance.yahoo.com) Those rates are lower than many unsecured borrowing options, but they are still far above the ultra-low first-lien mortgage rates many owners locked in earlier in the decade. (realtor.com) For borrowers weighing a project, that means the move-versus-remodel decision is not just about inventory. It is also about whether a renovation can be financed at a cost the household is willing to absorb. Kiplinger said owners considering projects in the next year or two are looking for ways to keep costs manageable as financing remains elevated. (finance.yahoo.com) ### What should readers watch next in the housing data? The St. Louis Fed’s FRED series for active U.S. listings showed 1,102,615 homes on the market in June 2026, with the next release scheduled for August 6. Realtor.com’s monthly housing reports will provide the next read on whether the inventory gap versus 2017-2019 norms is narrowing again or remaining stuck near that 17% mark. (fred.stlouisfed.org) (finance.yahoo.com)