Previous : 4.93 Million Unit
Forecast : 4.85 Million Unit

Definition : Existing Home Sales is a monthly release covering the number of closed sales of pre-owned single family homes, along with average sales price by geographic regions. The closed definition is very critical as closing periods are anywhere between six to eight weeks, so values listed are likely to sales made about two months prior. The data is collected and released by the National Association of Realtors from 650 realtor associations.

In addition to sales and prices, the report provides inventory levels which are provided through the months supply figure, which represents the time needed to burn through the inventory measured during the period.

Data is provided both raw and seasonally adjusted, that's because weather plays a significant role in determining monthly demand.

Why is it useful?
The report provides a measure for the level of sales of existing home sales, it's considered a good indicator of activity in the housing sector as it almost counts for 70%, as sales are highly dependant of mortgage rates and will tend to react in a few months lag to change in rates, as after a recession phase (recovery phase) in an economy sales are expected to come strong due to the gradually increasing demand which accumulated through the recession.

So existing home sales is directly connected to mortgage rates and so as a result will be affected by inflation if interest rates are considerably high this would lead to a decline in demand on mortgage loans as it would be very expensive for people to fund buying houses. Another way to look at this indicator is its effect on other indicators; when people buy new homes they need refrigerators, washers, dryers, and furniture and a lot more durable and nondurable goods, on the other hand the selling party will have money to be spent in the economy resulting in an expanding growth reflected by the consumers' confidence in the economy and their spending patterns.

We can track down the effect on every single sector that would be affected by the housing sector; because the trends in the existing home sales data carry valuable hints for the stocks of home builders, mortgage lenders and home furnishing companies. When having a strong economy that will be reflected on the currency's value yet though not having a major effect but still counts in the markets. Therefore, the effect of this indicator is somehow moderate on both the currency and the stock market and is affected mainly by current economic conditions at that phase in the economy which in role might provide it with a greater effect.