Supply is the number of homes for sale now or coming soon.

It includes active listings and new homes being built, which depend on costs, available builders, permits, and local rules. Owners also affect supply when they choose to list or stay put because they have a low mortgage rate. 

You can spot rising supply by watching:

• The number of listings
• Months of Supply
• Days on Market
• The share of price cuts
• For rentals, the vacancy rate and new apartment deliveries

Demand is the number of buyers who want and can afford to buy homes. 

Demand increases when:

• Mortgage rates are low
• Jobs and incomes are strong
• People move into the area
• Rents are high
• Buyers expect prices to rise

You can spot rising demand when there are more mortgage applications and pending sales, when home prices outrun incomes or rents, and when surveys show people feel positive about buying.

Reading the housing market is mostly about how supply and demand line up. 

Low supply and high demand push prices up and make homes sell faster. 

High supply and low demand soften prices and lengthen selling time.

Mortgage rates move demand quickly, while building takes time, so supply usually changes more slowly.

What's your take