Understanding ‘Current Month’s Inventory’

By Diana Zaya-Passarelli | Published November 17

Current Month’s Inventory’ also known as ‘Month’s Supply’ refers to the number of months it would take to deplete all the housing inventory within a particular market, given the current sales pace. This also assumes that no other homes come onto the market during that period. Current month’s inventory is calculated by taking the current number of listings within a particular market and dividing that by the average monthly sales for that market. Gaining an understanding of how fluctuations in housing inventory affect home values can help us to determine if the market is favorable to buyers or sellers.

In a normal market, there would typically be about 4-6 months of inventory. A healthy balance between ample supply as well as willing buyers helps to keep prices stable. Too many buyers on the market will send home values soaring. While too many sellers competing for buyers’ attention will cause home values to drop. A balanced real estate market provides plenty of supply while keeping homes values stable and increasing at a consistent and modest rate.

At Relitix, we help our clients gain deep market insights that impact their daily decisions. Our ‘Current Month’s Inventory’ tool can tell you how many months of inventory there is in any market, down to the neighborhood level. Going a step further, this tool also displays the impact that recent nationwide low inventories have had on home values. Staying informed with the latest in smart and practical tools is why real estate leaders consistently turn to Relitix. For more information, please reach out to us at info@reltiix.com.