What is likely to happen to house prices when the supply of houses increases while demand remains constant?

When the supply of houses increases while demand remains constant, basic economic principles dictate that prices are likely to decrease. This is because an increase in supply means there are more houses available for sale. If the number of people looking to buy houses doesn’t change, the competition among sellers increases, leading to downward pressure on prices.

When more homes are on the market, buyers have more options, which can lead to sellers reducing their prices in order to attract buyers. This is a fundamental concept of supply and demand; when supply outpaces demand, prices often fall in response to the changing market conditions. Therefore, if supply increases and demand stays the same, it creates an environment where a decrease in prices is the most probable outcome.