Is inventory demand because of the number of homes needed?

Or inventory demand because of the number of dollars chasing?

You omitted a major point: Price.

Demand for new housing is large because of the number of houses needed. HOWEVER, they can not be built due to extremely high prices--which are being raised even more by tariffs on building materials.

The amount of money consumers have to spend on housing is not sufficient to buy a house in today's market. PLUS, the economy is beginning to destabilize due to irrational economic claims by Spankee. Significant non-housing price increases in many areas (food, clothing, consumer goods, various appliances, and more) are beginning to show up in the prices consumers pay for everyday goods. That leaves the consumer even less money to spend on housing--or they buy less food, clothing, and so on in order to divert EVEN MORE limited funds to housing that is steadily becoming less and less affordable.