Many of my clients have come to me recently to ask what I think their house may be worth. I always share with them that there may be a lot of memories and intrinsic value but in the end house prices are determined by housing supply, housing demand, and housing affordability.

Housing Supply: What’s the Outlook?
Housing supply measures how many months it would take to sell all the houses currently listed for sale, at the current pace of home sales. For example, if there are 600 homes now listed for sale and an average of 100 homes are selling each month, there would be a six-month housing supply. This is because it would take six months to sell all the homes currently listed for sale.

A buyer’s market is anything more than six months. A seller’s market is anything less than six months.  In this case, sellers would have more significant negotiating power, and buyers may have to bid higher than the list price to compete with multiple offers.


Housing supply has been running below six months across the country, which indicates a seller’s market.  In many parts of the country, buyers are competing with multiple offers. In some cases dozens of offers on the same house.  This tells us that house prices are poised to continue going up in the next several months.

Housing Demand: What’s the Trend?
Housing demand tends to slow down in the fall because most home sales occur during the spring and summer.  Even so, housing demand is expected to remain strong because the economy is doing well and people have jobs in most parts of the country.  The chart to the right illustrates how there are more jobs available today than at any point in the past 15 years as measured by the Job Openings and Labor Turnover Survey (JOLTS) report.

Housing Affordability: Can Buyers Afford Houses at Current Prices?
The National Association of Realtors (NAR) publishes a “Housing Affordability Index.”  This is a chart illustrating NAR’s Housing Affordability Index for First-time Homebuyers.  A value of 100 means that a first-time homebuyer family with the median income has exactly enough income to qualify for a mortgage on a starter-priced home, with a 10 percent down payment.  An index above 100 signifies that a family earning the median income has more than enough income to qualify for a mortgage loan on a starter-priced home, assuming a 10 percent down payment.

Today’s index value of 113.0 means that a family earning the median family income has 113 percent of the income necessary to qualify for a conventional loan covering 90 percent of a starter-priced existing single-family home. This means that houses are still affordable for first-time buyers as they generally are making more than enough income to qualify for financing.  In fact, homes are more affordable today for first-time home buyers than they have been at any point in the past three years.

For move-up homebuyers, the affordability index is currently in the 156 range.  This also means that homes are very affordable for move-up homebuyers.

Keep in mind that housing affordability in your situation could be higher or lower depending on the amount of your down payment and the mortgage strategy you choose.

Conclusion: I anticipate an increase in house prices over the next several months because housing supply is likely to remain low, housing demand is likely to remain strong, and houses will continue to remain affordable for most buyers.

About the Author

David Reznikow is a loan officer at Fairway Independent Mortgage. A Brookline native and BHS graduate, Reznikow is currently a Newton resident but has remained part of the Brookline community. As a Brookline Chamber of Commerce Director and business member Reznikow has had the opportunity to add to the vibrancy and diversity of the business community while helping to raise funds for local charitable organizations through many Chamber initiatives. Both Reznikow’s parents have businesses in Brookline, still live in the home where they raised three children, and can often be found playing with their grandson, Cameron, at Dean Park