US: Existing Home Sales

Fri Oct 20 09:00:00 CDT 2017

Consensus Consensus Range Previous
Existing Home Sales - Level - SAAR 5.300M 5.100M to 5.400M 5.350M

Market Consensus Before Announcement
Weakness in the Harvey-hit region of the South pulled down existing home sales by 1.7 percent to a 5.350 million annualized rate though sales in the West were also weak. Price strength has been slowing though supply of available homes on the market has remained very tight. The National Association of Realtors warned in the last report that hurricane effects could slow resales through the remainder of the year. Forecasters see September's results, a month hit by Hurricane Irma's strike on Florida, coming in a bit lower at 5.300 million.

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.