Briefing

Forecasting House Price Growth Using Months Supply of Housing

Abstract: House prices are of keen interest to policymakers, economists, industry professionals and homebuyers. Naturally, forecasting the direction of house prices receives considerable attention. In this article, we'll examine a specific metric that has a robust ability to predict house price growth: months supply. Months supply is the number of houses available for sale divided by the number of houses sold per month. For example, if months supply is 6, it would take six months to sell all of the current inventory, assuming no additional houses were added and the sales per month did not change. Since the sales rate is the number of houses sold per month divided by the number of houses available for sale, months supply is also the inverse of the sales rate.

Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Richmond Fed Economic Brief

Publication Date: 2025-03

Volume: 25

Issue: 11