US: Existing Home Sales

Wed Sep 20 09:00:00 CDT 2017

Consensus Consensus Range Previous
Existing Home Sales - Level - SAAR 5.480M 5.350M to 5.550M 5.440M

Market Consensus Before Announcement
Existing home sales have been more disappointing than not, falling 1.3 percent in July to a 5.440 million annualized rate that, nevertheless, is still near expansion highs. Condo sales weakened in July as did sales of single-family homes. But forecasters do see some improvement for August with the consensus at 5.480 million despite Hurricane Harvey at month end. Note that sales of new homes, which have also been soft yet near expansion highs, won't be released until the following week.

Existing home sales tally the number of previously constructed homes, condominiums and co-ops in which a sale closed during the month. Existing homes (also known as home resales) account for a larger share of the market than new homes and indicate housing market trends. (National Association of Realtors)

This provides a gauge of not only the demand for housing, but the economic momentum. People have to be feeling pretty comfortable and confident in their own financial position to buy a house. Furthermore, this narrow piece of data has a powerful multiplier effect through the economy, and therefore across the markets and your investments. By tracking economic data such as home resales, investors can gain specific investment ideas as well as broad guidance for managing a portfolio.

Even though home resales don't always create new output, once the home is sold, it generates revenues for the realtor. It brings a myriad of consumption opportunities for the buyer.

Refrigerators, washers, dryers and furniture are just a few items home buyers might purchase. The economic "ripple effect" can be substantial especially when you think a hundred thousand new households around the country are doing this every month. Since the economic backdrop is the most pervasive influence on financial markets, home resales have a direct bearing on stocks, bonds and commodities. In a more specific sense, trends in the existing home sales data carry valuable clues for the stocks of home builders, mortgage lenders and home furnishings companies.