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What is Existing Home Supply?

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Updated: September 22, 2024

What is Existing Home Supply?

Existing Home Supply measures the number of months it would take to sell the entire inventory of existing homes at the current sales pace.

TABLE OF CONTENTS

Existing Home Supply: A Detailed Explanation

Existing Home Supply describes how much time it would take to sell the entire U.S. inventory of existing homes, based on the current pace of sales.

Published by the National Association of REALTORS®, home supply measures the balance between home buyers and sellers in the market. When supply is low, it indicates a Seller’s Market. When supply is high, it suggests a Buyer’s Market.

When home supply is less than 6.0 months, sellers have more negotiating power.
When home supply equals 6.0 months, the market is balanced.
When home supply is greater than 6.0 months, buyers have more negotiating power.

Existing Home Supply is published monthly as part of the larger Existing Home Sales report. This report includes data on median sales volume, median home sale prices, and housing inventory.

How is Existing Home Supply Calculated?

Existing Home Supply is calculated by dividing the total number of existing homes for sale at the end of the month by the monthly sales pace of existing homes. The result is expressed in months.

Existing Home Supply: Chart

Homebuyer.com uses the FRED® API but is not endorsed or certified by the Federal Reserve Bank of St. Louis.
Data: National Association of REALTORS®. Do not reprint without permission. National Association of Realtors, Existing Home Sales: Months Supply [HOSSUPUSM673N], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/HOSSUPUSM673N, November 14, 2024.

Common Questions About Existing Home Supply

What does a low Existing Home Supply mean?

When home supply is low, it indicates a seller’s market. This market condition is characterized by limited inventory, which can lead to higher housing prices due to increased competition among buyers.

Is Existing Home Supply the same as housing inventory?

Existing Home Supply is a different way to measure housing inventory. While housing inventory counts the number of homes available for sale, Existing Home Supply measures how long it would take to sell all those homes at the current sales pace.

How often is Existing Home Supply updated?

The Existing Home Supply report is updated monthly as part of the National Association of REALTORS®’ Existing Home Sales report, typically released during the last week of each month.

Does Existing Home Supply include the inventory of new homes?

Existing Home Supply refers only to the inventory of existing homes. It does not include newly constructed homes. This supply includes single-family homes, such as detached properties and condos, as well as multi-unit homes.

How is Existing Home Supply related to buyer and seller behavior?

Existing Home Supply reflects the balance between home buyer and seller behavior. A low supply often means increased competition among buyers, which can include first-time buyers. A high supply suggests more options for buyers, which can reduce competition.

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