The real estate market works according to the laws of supply and demand. If there are more buyers than homes available, prices will rise and buyers may find themselves in bidding wars. If there are more homes available than buyers, prices will fall and buyers will have more options to choose from. In either case, it is important to understand your local housing market inventory levels and how they might affect home prices in your area.
Every month, the National Association of Realtors (NAR) releases their latest Existing-Home Sales numbers. This data includes information about inventory levels and months’ supply. The monthly months’ supply number indicates how many months it would take for current housing inventory to sell at the current pace of sales. A higher months’ supply number is usually associated with more moderate price appreciation and a lower number is generally a sign of faster price appreciation. Read more https://www.acompanythatbuyshouses.com/sell-my-house-fast-texas/
In February 2024, NAR reported that the national active home inventory level was 1,110,000 homes, which is a decrease of 37.7% from the same period three years ago. Inventory levels were lower in nearly every metro area, with the largest declines occurring in markets such as Hartford, CT; Stamford, CT; and Allentown, PA.
This low inventory is due to several factors. One is that new home construction declined sharply during the Great Recession and has only recently re-started to some degree. Another is that many homeowners who might otherwise be ready to move are unable to because they can’t afford the cost of a new home at today’s mortgage rates. These people are choosing to stay in their current homes and are keeping them off the market, which further limits the inventory pool.
Even in areas where the inventory level is higher, there is still a lack of available homes for sale. A recent study by the Urban Institute compared the median income in different metro areas and found that only four of the 100 biggest metropolitan areas have housing stock that is affordable for people making the median income.
Locally, Southern New Hampshire’s inventory level is currently below where it normally is this time of year. Alperin says this means the market is still very much in seller’s territory and that it will be difficult to shift into a buyer’s market without an increase in availability.
The supply issue is further complicated by the fact that many buyers are waiting to buy until they see an increase in the number of homes for sale, which hasn’t happened yet. As a result, there is an enormous amount of pent-up demand in the market that could be unleashed once more homes hit the market. This is a major reason why it’s so important to pay attention to local housing market inventory trends and to speak with a real estate professional before you make any significant decisions about buying or selling your home. They can help you get the most out of your transaction.