Homebuilders in Sun Belt housing markets are working through a ‘spec overhang’
Want more housing market stories from Lance Lambert’s Resi Club in your inbox? Subscribe to the Resi Club newsletter. Speaking at the Bank of America Housing Symposium in June 2025, Toll Brothers CEO Doug Yearley—who has since stepped down—acknowledged that parts of Arizona, Florida, and Texas were dealing with spec inventory “overhangs” that he said would eventually “clean up [over time] because the builders are starting fewer spec homes in the softer market, and I think that will naturally work its way out.” At the height of the Pandemic Housing Boom, when nearly everything homebuilders were building was flying off the shelves, there were only 32,000 unsold completed new-build homes in March 2022. Once the boom fizzled out, that figure quickly began to rebound—especially in Sun Belt boomtowns—reaching a high of 134,000 unsold completed new-build homes by December 2025. However, data published this week shows that the number of unsold completed new-build homes has, at least for now, fallen to 119,000 as of March 2026. While the count of unsold completed new-build homes is still up year-over-year (there were 113,000 unsold completed in March 2025), the decline over the past few months has been larger than seasonality alone would suggest. To put the number of unsold completed new single-family homes into better historic context, we have the ResiClub Finished Unsold New Homes Supply Index. It accounts for unsold completed inventory relative to new home sales. 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. Over the past few months, that reading has almost drifted back down into the “historically normal” range. After experiencing a softer 2025 than expected—and greater-than-expected margin compression—many giant homebuilders told analysts heading into 2026 that they’d pivot toward fewer spec builds and more build-to-order homes