Existing home sales data measures the monthly sales of previously-owned single-family houses.
By understanding the background, importance, source, availability, and frequency of this report, investors and economists can better analyze and interpret the data, enabling them to make more informed decisions about the economy and the housing market.
What is the Existing Home Sales report?
The Existing Home Sales report is a crucial economic indicator that provides insights into the health of the housing market and overall economic activity.
The Existing Home Sales report measures the number of completed transactions for single-family homes, townhouses, condominiums, and co-ops within a given month.
These sales figures help to create a snapshot of the housing market’s current state and provide valuable insights into trends and fluctuations.
By analyzing the Existing Home Sales report, economists and investors can identify potential shifts in the housing market, which can have broader implications for the economy as a whole.
Why is the Existing Home Sales data important?
The Existing Home Sales report is considered a leading economic indicator, as it reflects the strength of consumer spending and borrowing patterns.
A healthy housing market often correlates with a strong economy, as home purchases involve significant financial commitments and typically lead to additional spending on home improvements, furniture, and appliances.
Additionally, the housing market can impact other areas of the economy, such as the construction and lending industries. Therefore, monitoring existing home sales can help provide a comprehensive understanding of the overall economic climate.
Almost eight out of every 10 houses are existing homes, while the rest are newly constructed. Sales of existing homes can provide economic stimulus.
Some sellers will use the profits from the sale of their existing house and buy a bigger house which usually means more spending on furniture and appliances.
Other sellers will choose to simply spend their profits on discretionary items. An uptrend in existing home sales also means more commissions to real estate agents and higher revenue for mortgage lenders and moving companies.
Existing home sales are used as an indicator of consumer spending and can influence interest rates.
Generally, strong growth of existing home sales is dollar bullish. A decline in existing home sales over several months is dollar bearish since this would cause interest rates to fall which weakens demand for the dollar.
Source:
The National Association of Realtors (NAR) is the primary source of the Existing Home Sales report. As a leading trade association representing real estate professionals in the United States, the NAR collects and analyzes data from Multiple Listing Services (MLS) across the country to compile the report.
By aggregating sales data from a wide range of sources, the NAR ensures that the Existing Home Sales report is accurate and representative of the broader housing market.
Availability:
The Existing Home Sales report is typically released on a monthly basis, around the third week of the month following the reporting month.
For example, the report for January would be released in February. The NAR publishes the report on its website, making it readily available to economists, investors, and the general public.
Frequency:
As mentioned earlier, the Existing Home Sales report is published on a monthly basis, providing a regular and up-to-date assessment of the housing market.
This frequent release allows for the tracking of trends and changes in the market, as well as the ability to identify potential turning points or emerging patterns that may impact the broader economy.