| Consensus | Consensus Range | Actual | Previous | Revised | |
| Annual Rate | 3.965M | 3.890M to 4.010M | 3.990M | 3.980M | 3.930M |
| Month over Month | 1.5% | -2.0% | -3.2% | ||
| Year over Year | -2.2% | -1.2% |
Highlights
Sales are up 1.5 percent on the month to a 3.99 million unit rate in September from a downward revised 3.93 million in August (was 3.98 million previously). The drop from July's 4.06 million to August is now 3.2 percent.
So 3.99 million for September is better than the 3.965 million Econoday median forecast but it's still depressed. August and September are the weakest sales months of the year so far as rising mortgage rates push many houses out of reach for many would-be buyers. Mortgage rates appear headed higher still as the bond market selloff continues and the benchmark US Treasury 10-year note reaches 5.25 percent.
Market Consensus Before Announcement
The consensus sees a softer 3.965 million for September from 3.980 in August as rising mortgage rates hold down demand.
Definition
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.
Description
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.
