Monthly · Census Bureau via FRED
Months Supply of Homes answers a simple question: at the current sales pace, how long would it take to sell every home currently listed for sale? A low number means buyers are competing for limited inventory. A high number means sellers are waiting with no takers. It is a supply-demand balance indicator that directly predicts whether prices will rise or fall in the near term. Published monthly by the National Association of Realtors and the Census Bureau.
Below 3 months is a tight seller market with rising prices and frequent bidding wars - the 2020-2021 period saw supply below 2 months nationally. Between 4-6 months is considered balanced. Above 6 months favors buyers and typically precedes price softening. Above 9 months is serious oversupply, as seen during the 2008-2012 bust when it exceeded 12 months in several markets. New home supply tends to be more elastic since builders can adjust production; existing home supply is more driven by homeowner decisions to list and is stickier.
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