- Importance (A-F): This release merits a C.
- Source: The National Association of Realtors.
- Release Time: 10:00 ET around the 25th of the month (data for month
- Raw Data Available At: http://nar.realtor.com/news/releases.htm
The name speaks for itself - this report provides a measure of the level of
sales of existing home sales. The report is considered a decent indicator of
activity in the housing sector. Housing starts precede this report each month,
but starts are a supply rather than demand-side indicator. Existing home sales
precede the other key demand-side indicator of housing - new home sales - thus
boosting the visibility of this report. Sales are highly dependent on mortgage
rates, and will tend to react with a few months lag to changes in rates. Sales
are also determined by the level of pent-up demand for housing - immediately
after a recession, sales are typically quite strong due to the demand which
accumulated through the recession.
The survey sample for existing home sales is larger than that of new home
sales, making it somewhat less susceptible to large revisions. Both reports can
see huge month-to-month swings in winter, when bad weather can significantly
Aside from total sales, two other indicators are worth watching in this
report -- the inventory of homes for sale and the median price. The inventory of
homes for sale at the current sales pace is the inventory/sales ratio of the
housing sector. For example, a 5.0 figure for inventory/sales indicates that the
supply of homes for sale would be depleted within five months at the current
sales pace. The lower this figure goes, the greater the need for new housing
starts. The year/year change in the median price provides a good indication of
inflation in home prices.