Unsold Inventory Index

DEFINITION of 'Unsold Inventory Index'

A monthly statistic released nationally that details the number of unsold homes expressed in the time (in months) it would take to sell them at current rates. When the unsold inventory index is compared to the average number of sales per month in the recent past, it indicates the pace or velocity of home sales.

BREAKING DOWN 'Unsold Inventory Index'

The unsold inventory index is watched closely on local, state and national levels as a primary indicator of housing-market health. A rising index number indicates a slowing market, while a declining number means the market is improving. For example, if the unsold inventory is two months, it would be considered a seller's market, while eight months would be considered a distressed or buyer's market.

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RELATED FAQS
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    Learn how to analyze inventory using financial statements and footnotes by doing ratio analysis and performing qualitative ... Read Answer >>
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    Learn about days sales of inventory and what it measures; understand why an investor would want to know a company's days ... Read Answer >>
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    Learn about the inventory turnover ratio, how it is calculated and what this efficiency metric tells businesses about their ... Read Answer >>
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    Discover the formula to calculate days sales of inventory and how it is helpful to market analysts and investors, but it ... Read Answer >>
  5. Why is it sometimes better to use an average inventory figure when calculating the ...

    For a couple of key reasons, average inventory can be a better and more accurate measure when calculating the inventory turnover ... Read Answer >>
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