Exploring Economic Indicators: The Housing Market

Economic indicators are released every week to provide insight into the overall health and performance of an economy. They serve as essential tools for policymakers, advisors, investors, and businesses because they allow them to make informed decisions regarding business strategies and financial markets. In the week ending March 20, the SPDR S&P 500 ETF Trust (SPY) rose 1.72 %, while the Invesco S&P 500 Equal Weight ETF (RSP) was up 2.23%.

Last week, the U.S. housing market took center stage, with data releases on several housing-related indicators. This article highlights a handful of these crucial housing indicators from the past week, such as existing home sales, housing starts, builder confidence, and building permits. These indicators provide a comprehensive overview of the housing market, offering insights into both supply and demand dynamics, as well as market sentiment.

The housing indicators discussed in this article could impact home builders and residential real estate ETFs such as the Invesco Dynamic Building & Construction ETF (PKB), iShares U.S. Home Construction ETF (ITB), SPDR S&P Homebuilders ETF (XHB), and iShares Residential and Multisector Real Estate ETF (REZ).

Economic Indicators: Existing Home Sales

Existing home sales jumped to their highest level in a year as additional housing supply helped satisfy strong buyer demand. In February, existing home sales rose 9.5% to a seasonally adjusted annual rate of 4.38 million units, marking the second consecutive monthly increase. This uptick potentially signals a turning point in existing home sales, which have been consistently declining over the past two years. The latest figure was higher than expected, with sales exceeding the projected 3.95 million units.

Strong buyer demand caused the price for an existing home to also climb higher in February. The median price for an existing home was $384,500 last month, a 1.6% increase from January. Additionally, compared to one year ago, the median price for an existing home was up 5.7%, marking the eighth consecutive month of annual increases.

Existing Homes Sales