Existing Home Sales Explained
The Existing-Home Sales data measures sales and prices of existing single-family homes for the nation overall, and gives breakdowns for the West, Midwest, South, and Northeast regions of the country. These figures include condos and co-ops, in addition to single-family homes.
NAR Media Communications issues a news release on or near the 25th of each month with the latest existing-home sales figures. The releases include analysis and quotes by NAR’s Chief Economist Lawrence Yun regarding the sales volume, prices, inventory and interest rates.
What Are Existing Home Sales?
Existing-home sales data are a monthly measure of the sales volume and prices of existing single-family homes, condos, and co-ops nationwide. But what exactly are existing-homes? Existing-homes, unlike new homes, are homes that are owned and occupied before coming onto the market.
Existing-home sales account for more than 90 percent of total home sales, and the monthly data captures completed transactions.
Each month, NAR surveys a representative sample of 160 Boards and MLSs, which account for approximately 40 percent of all existing-home transactions. This raw data is divided into the four census regions: Northeast, South, Midwest, and West.
The raw sales volume from the participating Boards/MLSs is carefully evaluated by the NAR Research team to ensure accuracy.
Then the aggregated raw volume figures are weighted to accurately represent sales activity for each region of the country. This is also called the non-seasonally-adjusted volume.
Sales price, both the median and mean (average), are also computed for the nation and four census regions on a monthly basis. The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions.
The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos (as seen in NAR’s quarterly metro area price reports).
Every year sales activity tends to increase in spring and summer while typically slowing down in winter. Sales activity between February and March typically increases by 34 percent while prices rise by 3 percent . In contrast, the slowest months of selling activity are November, December, January, and February, with January being the slowest. When the weather is nicer, more people tend to look at homes.
However, these disparities don’t represent actual trends in the housing market because they are mostly due to seasonal variances. As a result, taking the seasonal differences out of the equation and creating an annualized rate really shows how the resale market is performing.
The annual rate for a particular month represents what the total number of sales for a year would be if the relative pace for that month were maintained for 12 consecutive months.
Why is Existing-Home Sales Data Important to REALTORS®?
NAR releases EHS data on a monthly basis to provide accurate and timely information on the state of the U.S. housing market. Knowing the monthly changes in home sales and price can provide a snapshot of what is happening in the market, and what trends and challenges face the market both nationally and in each region.
In addition to providing a basis for our membership to understand the latest housing trends, it is widely reported by the national press. Moreover, the data enhances the effectiveness of NAR’s political and representational efforts on behalf of our members on Capitol Hill.