What are the current home sales?
The data measures current home sales transactions and reports on individual home sales and prices for existing single-family homes, condos, and cooperatives in the United States, broken down by region – West, Midwest, South, and Northeast.
This metric can be compared with new home sales and starts, as both track newly built homes rather than the existing housing inventory.
Understanding current home sales
The current home sales report is released monthly by the National Association of Realtors (NAR) based on closed residential real estate transactions. It is a lagging indicator because people often make housing decisions in response to changes in interest rates.
According to the National Association of Realtors (NAR), most current home sales transaction reports occur after closing and do not account for pending sales that are still under contract. Typically, the majority of transactions involve a mortgage loan, which can take 30 to 60 days to close. As a result, current home sales data likely includes contracts signed one to two months prior to the report’s publication.
Current home sales vs new homes
The U.S. Census Bureau compiles and publishes data on new home sales. The bureau defines new home sales as the signing of a sales contract for a home or the acceptance of a deposit. This information also comes from new building permits at the state level. A home can be at any stage of construction.
This process includes structures that have not yet begun, those under construction, and completed structures. About 25% of homes are sold at completion. The remaining 75% are evenly split between those that have not yet started and those under construction.
New home sales data and current home sales data are typically released at the same time each month. Due to the difference in definitions, new home sales lead current home sales in reflecting changes in the housing sales market by a period of two to three months. For example, a current home sale in January may have been signed 30 to 45 days prior in November or December of the previous year. This gap is attributed to the normal time it takes to finalize sale documents and close the mortgage.
Home data sources
Several different reports analyze the housing market in the United States. These various indicators provide insights into different aspects of the housing market and give a view of buyer activity and regional trends:
– The National Association of Realtors established a new monthly series in 2005 to overcome the lagging effect of current home sales, called the Pending Home Sales Index (PHSI). Like new home sales data, the PHSI can be seen as an early indicator of increasing housing demand. This report is issued during the first week of each month and measures housing contract activity. The index is based on signed contracts for existing single-family homes, condos, and cooperatives.
– The housing affordability index measures whether the typical family earns enough income to qualify for a mortgage loan on an average home at the national and regional levels based on the latest monthly price and income data.
– The realtors’ affordability distribution curve and points measure housing affordability at different income points for all active inventory in the market. For each state, the curve shows how many homes are affordable for households grouped by income. The points represent varying income affordability within a single measure.
– The average urban home prices and affordability publish statistics every quarter. The reports reflect the prices sold for existing single-family homes, condos, and cooperative housing by metropolitan statistical area (MSA). The quarterly qualifying income report shows the income necessary to qualify to purchase a median-priced single-family home in each metropolitan area with various assumptions about the down payment.
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The report on average home prices in the county and the monthly mortgage payment refers to the median values of homes in 3,119 counties and equivalents in the United States. Its calculation comes from comparing the growth of the Federal Housing Finance Agency (FHFA) Home Price Index with the latest housing data from the American Community Survey. Home values represent the value of all homes rather than home sales.
Sources Used in the Article
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National Association of Realtors. “Current Home Sales.” Accessed March 3, 2021.
U.S. Census Bureau. “New Home Sales vs Existing Home Sales.” Accessed March 3, 2021.
National Association of Realtors. “Housing Affordability Index.” Accessed March 3, 2021.
National Association of Realtors. “Realtor Affordability Distribution Curve and Score.” Accessed March 3, 2021.
National Association of Realtors. “Urban Home Prices and Affordability in Major Urban Areas.” Accessed March 3, 2021.
National Association of Realtors. “County Home Prices and Monthly Mortgage Payment.” Accessed March 3, 2021.
Related Terms
– S&P CoreLogic Case-Shiller National Home Price Index
– National Association of Realtors (NAR)
– Pending Home Sales Index (PHSI): What It Means and How It Works
– Repeat Sales Method: Definition, Advantages, Disadvantages, and Examples
– Construction Activity Indicators: What It Is and How It Works, with an Example
– What Is a Short Sale of a Home? The Process, Alternatives, and Mistakes to Avoid
Source: https://www.investopedia.com/terms/e/existinghomesales.asp
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