All glossary terms

Months of Inventory

Definition

Months of inventory (also called months of supply) estimates how long it would take to sell every home currently for sale if no new listings were added, given the recent pace of sales. It is one of the cleanest single measures of the balance between supply and demand.

Formula

Active listings / homes sold (or going pending) per month

How to interpret it

A common rule of thumb: under 3 months of inventory is a seller’s market, 3 to 6 months is balanced, and above 6 months is a buyer’s market. It is a market-temperature gauge — low supply supports rising prices, high supply pressures them downward.

See months of inventory for any state, metro, county, or ZIP code in the Reatlas Market Explorer.

Explore the data

Related terms

Source: Reatlas analysis of U.S. Census American Community Survey (ACS), Realtor.com, and Zillow market data.