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Carmel Indiana Home - Existing Home Supply

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What is Existing Home Supply?

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

Existing Home Supply: A Detailed Explanation

Existing Home Supply describes how much time it would take to deplete the complete U.S. inventory of existing homes for sale, given the current sales pace.

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

  • When home supply is less than 6.0 months, sellers have negotiation leverage
  • When home supply is equal to 6.0 months, the market is balanced
  • When home supply is greater than 6.0 months, buyers have negotiation leverage

Existing Home Supply is published monthly as part of the larger Existing Home Sales report, including median sales volume, median home sale, 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.

Common Questions About Existing Home Supply

What does a low Existing Home Supply mean?

When home supply is low, it indicates a seller’s real estate market, characterized by limited inventory for buyers to buy and potentially higher housing prices.

Is Existing Home Supply the same as housing inventory?

Existing Home Supply is a different way to measure home inventory. Home inventory counts the number of homes available for sale whereas home supply measures the number of months it would take for buyers to purchase all of those available homes.

How often is Existing Home Supply updated?

The Existing Home Supply report is updated monthly as part of NAR’s broader Existing Home Sales report, usually during the last week of the month.

Does Existing Home Supply include the inventory of new homes?

Existing Home Supply exclusively pertains to existing home inventory and does not include new home construction. It includes single-family homes such as detached properties and condos, and 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 higher competition among home buyers, including first-time home buyers, while a high supply indicates more options for buyers and potentially less competition.

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

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