US: Existing Home Sales

Wed Mar 21 09:00:00 CDT 2018

Consensus Consensus Range Previous
Existing Home Sales - Level - SAAR 5.420M 5.300M to 5.620M 5.380M

Market Consensus Before Announcement
Existing home sales have been slowing and any rebound looks to be contained based on pending sales which are down sharply. Supply of resales on the market is very thin and a stubborn and increasing obstacle to sales growth. Econoday's consensus for February is a 5.420 million annualized rate which would be up from January's disappointing 5.380 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.