The Existing Home Sales Report Index, published by the National Association of Realtors is released every month where the results are based on the number of closed sales in the housing market activity. Considered to be a leading economic indicator, the Existing Home Sales Report Index reacts to any changes in the mortgage rates as obvious. Not to be mistaken for sales of new homes, the Existing Home Sales Report Index measures the sales of existing homes only.
While calculating the existing home sales, a time period of up to two months is considered, therefore the data published under the Existing Home Sales Report reflects on closed existing home sales prior to two months. The Existing Home sales takes into account these seasonal variations into their monthly reports. The existing home sales data reflects on the percentage changes from the year-over-year period as well as the previous month change.
The Existing Home Sales Report is released on the 4th week of the month at 8:30AM EST and focuses on the previous month’s closed sales on the NAR Website.
Existing Home Sales – How is it calculated
The National Association of Realtors receives data each month on the number of existing home sales that were closed with data inputs from multiple listing services and a number of real estate brokers. The data that is caputred reflects about 40% of the home sale transactions.
The existing home sales data is categorized into four census regions; Northeast, South, Midwest and West with the Median and Mean prices that are computed accordingly. The data is then aggregated and weighted according to the regions specified. The Existing Home Sales takes into account any home sale that is less than $30,000 in sale to more than $600,000.
Because of the way the Home sales prices are distributed, the mean sales price is comparitively higher than the median price. Furthermore the existing home sales is affected by seasonal variations as well with higher sales during the summer months and reaches its peak around the third Quarter of the year before dropping moderately in the consequent months that follow.
Mortgage rates also make up for any variations on the Existing home sales report and is one of the biggest factors to consider. The general concept being that as mortgage rates increase, sales plummet and vice versa. An increase in the existing sales can trigger an increase in other relative markets such as home improvement retail and mortgage lenders.
The Existing Home Sales Report is an important indicator to look at as purchasing a home is perhaps one of the biggest invement an individual would make and this aptly reflects on the general consumer mood and the economy. A higher than expected result usually sets the USD on a Bull Run, while a less than expected result makes the USD more bearish. Currencies to trade during the Existing Home Sales Report include, EUR/USD, USD/GBP, USD/JPY.