The housing market fluctuates all the time, which can impact both buyers and sellers. While both buyers and sellers are looking for the best deal, it's important to understand how the current market could affect your decisions.

If you're contemplating buying or selling a home, you should understand how the housing inventory impacts you.

Buyers Market

More people selling homes than buying.

How it affects buyers 

• More home options
• Better negotiating power
• Could potentially pay lower than asking price

How it affects sellers

• Takes longer to sell
• May receive fewer offers
• May have to accept lower than asking price, pay seller concessions, or make repairs in order to sell

Sellers Market

More people buying homes than selling.

How it affects buyers

• Fewer home options
• More competition among homebuyers
• Important to work with a lender that can close loans quickly
• Be prepared to pay higher than asking price

How it affects sellers

• Homes sell quickly
• Likely to receive multiple offers
• Could sell at higher price
• Buyers willing to overlook minor repairs that may be needed

When is it a buyer's or a seller's market?

A buyer’s or seller’s market is determined by the housing supply, or how long it would take to sell all the houses currently for sale.

Buyer's market = More than 6 months' housing supply.

Seller's market = Less than 6 months' housing supply

You can calculate this by dividing the number of homes for sale by the number of houses sold in a given month. For example, if 300 houses were for sale last month but only 100 sold, that would equal a 3 month housing supply (or seller's market). Keep in mind, the housing inventory may vary from city to city and may also depend on the time of year.