What Is Months of Inventory and Why Does It Matter?
Months of inventory is the number of months it would take to sell every current listing at the current pace of sales, and it is a more reliable signal of buyer or seller leverage than headlines about rates or prices alone. It is one of the most useful numbers in real estate and one of the least talked about outside the industry.
Who This Applies To
This applies to anyone in York Region or South Simcoe trying to judge whether current conditions favour negotiating on price and conditions, whether they are buying, selling, or simply watching the market before deciding.
How It Is Calculated
Months of inventory is calculated by dividing the number of active listings by the average number of sales per month. A market with 200 active listings and 50 sales per month has roughly 4 months of inventory.
What the Number Generally Means
| Months of Inventory | Market Condition | Who It Favours |
|---|---|---|
| Under 2 months | Strong seller’s market | Sellers |
| 2 to 4 months | Balanced-to-seller’s market | Sellers, with some buyer room |
| 4 to 6 months | Balanced-to-buyer’s market | Buyers, with negotiating leverage |
| Over 6 months | Buyer’s market | Buyers significantly |
These ranges are general industry rules of thumb, not a fixed rule for every community or property type.
A York Region Example
Newmarket recorded months of inventory of 4.3 in May 2026, the lowest figure in the York Region and South Simcoe corridor according to TRREB MLS® data. Even the tightest market in the corridor was sitting in the balanced-to-buyer range rather than the seller’s market range.
Quick Answers
What is months of inventory in real estate?
Months of inventory is the number of months it would take to sell all current listings at the current pace of sales. It is calculated by dividing active listings by monthly sales volume. It is the most reliable single number for reading whether a market favours buyers or sellers.
Is a high months of inventory good or bad?
It depends on whether the reader is buying or selling. A high months of inventory figure generally favours buyers with more negotiating room, while a low figure generally favours sellers.
How often does months of inventory change?
It moves monthly as TRREB MLS® reports new listing and sales data, and it should be checked against the current month rather than assumed from a prior month’s figure.
Want the numbers that apply to your specific home or move? Get a free, no-obligation home value estimate at pambechard.com. Pam Bechard, Listing Strategist with Royal LePage RCR Realty, will follow up directly with the comparable sales behind your number.
About Pam Bechard
Pam Bechard is a Listing Strategist with Royal LePage RCR Realty serving Newmarket, Aurora, East Gwillimbury, Bradford West Gwillimbury, Holland Landing, Queensville, Sharon, Innisfil, and the surrounding York Region and South Simcoe communities. Every figure in this article is sourced directly from TRREB MLS® market data with full attribution.
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