It depends heavily on your market, and it starts with reading the supply number correctly, because the scary headline figure lumps three very different things together. - Completed homes sitting unsold. Typically a small share, and the place builders react first with incentives and price cuts. - Homes under active construction. A chunk are already pre-sold and under contract, so they are not all headed to the open market. Build timelines can also stretch well past the normal six months, which spreads them out rather than dumping them at once. - Permits. Some homes get counted as new construction because a permit was pulled, even though nobody has broken ground. A high share of those never get built until a builder sees a better profit window. New construction can pressure prices, and it is the most exposed segment. An individual owner can simply decline to sell; a builder cannot afford to sit on unsold inventory indefinitely, which makes builders the more motivated sellers. But they rarely fire-sale. They have sophisticated teams deciding when to slow completions and when to lean on rate buydowns and long-term rate locks instead of cutting the sticker price. In land-constrained metros with little new construction, the local effect is smaller regardless. We will not predict a broad price direction from this, because nobody can. Watch completed-but-unsold supply and builder incentives in your own metro for the real signal.