If you’ve been following the housing market over the past few years, you know that sellers have had the upper hand. But with inventory starting to grow, is the market shifting? Here's what you need to know about the current landscape.


What Is a Balanced Market?


A balanced market occurs when there’s a five-to-seven-month supply of homes for sale. In this environment, neither buyers nor sellers hold a clear advantage. Prices tend to stabilize, and buyers have more homes to choose from. After years of sellers dominating the market, a balanced market would be a welcome change for buyers. The big question is: are we heading in that direction?

At the start of the year, there was a three-month supply of homes nationally, which has since increased to a four-month supply. While this may not seem like a significant shift, it indicates that the market is inching closer to balance, though it’s not quite there yet. It’s important to recognize that this rise in inventory doesn’t suggest an oversupply, which could lead to a market crash. Even with recent growth, there’s still far from enough inventory for that.

The following graph, sourced from the National Association of Realtors (NAR), shows the inventory trends over recent years and where we stand today:


At the moment, we are still in seller’s market territory—just not as competitive as it was in recent years. As Mark Fleming, Chief Economist at First American, puts it:
"The faster housing supply increases, the more affordability improves, and the strength of a seller’s market wanes."


What This Means for You


Here’s how this shift impacts you, depending on whether you’re buying or selling. Lawrence Yun, Chief Economist at NAR, explains:


"Homes are staying on the market a bit longer, and sellers are receiving fewer offers. More buyers are requesting home inspections and appraisals, while inventory is clearly rising on a national level."

Let’s break down how these changes affect the buying and selling process:


  • Homes Are Spending More Time on the Market: With more inventory available, homes are not selling as quickly. For buyers, this gives you more time to make decisions. Sellers, on the other hand, should focus on pricing their homes competitively to attract interest.

  • Sellers Are Receiving Fewer Offers: If you’re selling, you may need to be more open to negotiating on price or other terms to close the deal. For buyers, this can mean less intense competition, giving you more flexibility in negotiations.

  • Fewer Buyers Are Waiving Inspections: With increased buyer power, fewer people are waiving inspections. Sellers should be prepared to address repair requests during negotiations to keep the transaction moving smoothly.



How a Real Estate Agent Can Help


While national trends give us a broad view, local markets can vary greatly. That’s why it’s crucial to lean on a real estate agent who understands the specific dynamics of your area. Whether you’re buying or selling, having an agent with local expertise can help you navigate the market and make informed decisions.



Bottom Line


The housing market is always evolving, and it’s essential to stay updated on the latest trends. Whether you’re buying or selling, understanding this shift toward a more balanced market can give you a strategic advantage. If you have any questions or need expert advice, don’t hesitate to reach out—having a real estate professional by your side can make all the difference.