Months of Supply Inventory further indicates high demand relative to supply
Homes are selling faster than ever. Buyers must put in competitive offers, which, on average, are near list price.
Months of Supply Inventory (MSI) quantifies the supply/demand relationship by measuring how many months it would take for all current homes listed on the market to sell at the current rate of sales. The average MSI is three months in California, which indicates a balanced market. An MSI lower than three indicates that there are more buyers than sellers on the market (meaning it’s a sellers’ market), while a higher MSI indicates there are more sellers than buyers (meaning it’s a buyers’ market). Currently, single-family home and condo MSIs are exceptionally low, indicating a strong sellers’ market.
Market Update.
Home prices in Greater Houston remained historically high in April; short-term demand boomed as buyers tried to lock in lower mortgage rates.
Home prices in Texas’s major metro areas reached record highs in April; short-term demand boomed as buyers tried to lock in lower mortgage rates.
The second quarter of 2022 will indicate whether the market is moving toward or away from normalization. April data show the number of homes for sale continuing to increase, although still historically low.
Despite some minor softening of demand as rates increase, low housing supply will continue to drive prices up unless an unexpected number of new listings come to market.
