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Months of Supply

How To Analyze Supply and Demand

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Months of Supply = (Active Listings at end-of-period / Average monthly sales over last 12 months)

Months of Supply (also known as "Months Supply of Inventory") tells you how many months it would take for all the current homes for sale on the market to sell, given the sales rate for that market. RBI's calculation takes into account the seasonal fluctuations of selling activity by applying the average sales rate of the prior 12 months. 4 to 6 Months is generally considered a balanced market; less than 4 months a sellers' market as there are more buyers than homes available; more than 6 months can be considered a buyers' market as there are more homes for sale than buyers to purchase them.