Home Mortgage Alliance Corporation (HMAC)

While real estate is a numbers game, the market is slowly creeping toward balance

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Published Date 6/3/2024

Seems anyone and everyone interested in real estate is getting whiplash trying to figure out what the daily news portends for their futures.

Whether you’re a buyer who feels boxed out of the market or a homeowner who feels frozen in place because selling means never finding the interest rate you have again, not a day seems to go by without a housing market headline breaking down a new set of real estate data. What does it all mean?

Realtor.com’s Margaret Heidenry says it is possible to figure out who is in the driver’s seat in the real estate market. “Sometimes, it’s the seller. Once in a blue moon, buyers will be in control or the market is balanced. And, believe it or not—often neither buyers nor sellers are in control.” She says when the latter happens, it’s called a “nobody market.”

Today’s market still favors sellers, albeit by a slim margin. “The market is still leaning toward a seller’s market, but has gained balance since the pandemic,” says Hannah Jones, Realtor’s senior economic research analyst.

As has been common in recorded history, the data that decides who holds pole position in the market generally hinges on supply and demand. The rules never change much: a buyer’s market is indicated by a glut of listing pages offering loads of well-priced homes for sale. And a housing market with old or scant housing stock means sellers have the leverage.

“If there is more than a five-month supply of homes available, it’s a seller’s market. A five- to seven-month supply of homes indicates that it is a balanced market. Anything more than a seven-month supply of homes means it’s a buyer’s market,” explains Heidenry. She says that the April housing supply data indicate new- and existing-home sales and overall housing stock levels were at a four-month mark — the highest they have been in March since 2019. But the total housing supply is still woefully down from pre-pandemic levels — nearly 40%.

“New-home inventory is benefiting overall home supply, pushing the market toward more balance,” says Jones. “However, it is important to note that only about 1 in every 5 new homes for sale is completed. This means that though the data suggests considerable new-home supply, many of these homes are not move-in ready.”

Believe it or not, the last time buyers held an advantage was in early 2012, according to Jones. “Back then, housing stock was a little over a seven-month supply, meaning it’s been 12 years since supply outweighed demand.” However Realtor’s Chief Economist Danielle Hale says the market is moving “toward balance” with more than a five-month supply of homes, a market not seen since early 2019. Light at the end of the tunnel. That’s all we ask.

Realtor, TBWS

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