If you’ve been following the housing market recently, you know sellers have held the upper hand. But with inventory on the rise, is that dynamic starting to change? Here’s what you need to know.

Understanding a Balanced Market

A balanced market typically has a five-to-seven-month supply of homes for sale, where neither buyers nor sellers have a clear advantage. In such a market, prices stabilize, and there’s a healthier selection of homes. After years of a seller’s market, a shift toward balance would be welcome news for buyers. But are we heading there?

At the beginning of the year, the national inventory stood at a three-month supply, and now it has grown to four months. While that doesn’t yet indicate a balanced market, it shows we’re moving closer. However, this rise in inventory isn’t leading to an oversupply or a market crash. The supply is still insufficient for such a scenario.

The chart below, using data from the National Association of Realtors (NAR), illustrates past inventory levels compared to today:

For now, we remain in a seller’s market, though it’s less intense than in recent years. As Mark Fleming, Chief Economist at First American, notes:

“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 these changes might affect you:

• Homes Are Sitting on the Market Longer: With more homes available, they’re not selling as quickly. Buyers may have more time to find the right home, while sellers should consider pricing competitively to attract offers.

• Sellers Are Receiving Fewer Offers: Sellers may need to be more flexible on price or terms. Buyers could face less competition, giving them more options.

• Fewer Buyers Are Waiving Inspections: Buyers have more leverage now and are less likely to waive inspections. Sellers should be prepared to negotiate and address repair requests to close deals.

How a Real Estate Agent Can Help

This national trend may vary locally, so it’s crucial to consult with a real estate agent who understands your area. They can provide the latest data and insights to help you navigate the market.

Bottom Line

The housing market is evolving, and staying informed is key whether you’re buying or selling. Understanding this shift toward balance can help you make better decisions. If you have questions or need expert advice, feel free to reach out.