Existing home sales measure completed U.S. transactions for previously owned homes; analysts compare sales pace, inventory, prices, regions, and months' supply.
Existing home sales measure completed transactions involving previously owned and occupied homes. In the United States, the National Association of Realtors (NAR) publishes a monthly estimate covering existing single-family homes, condominiums, and cooperative housing. The headline sales figure is normally shown at a seasonally adjusted annual rate (SAAR).
The release is primarily a transaction-volume indicator. It also reports inventory, months’ supply, and median sales prices, but those measures answer different questions. Existing Home Sales does not directly measure signed contracts, mortgage applications, new construction, constant-quality home-price appreciation, or the value of a particular property.
The core series measures completed sales of homes that were owned and occupied before being offered for sale. NAR includes:
A townhouse is not necessarily a separate statistical category. Depending on its ownership and legal form, it may appear in the single-family or condo/co-op component.
The transaction is counted when it closes. That is a major difference from a signed sales contract. A property can go under contract but fail to close because of financing, appraisal, inspection, title, insurance, or other issues. It does not enter Existing Home Sales until the completed transaction is recorded in the source data.
“Existing” describes the home’s transaction history, not its age or condition. A recently constructed home can become an existing home in a later resale. An older house sold for the first time by its builder may instead fall under the new-home methodology if it meets that series’ coverage rules.
The sales count includes completed transactions regardless of whether the buyer used a mortgage or paid cash under the publisher’s coverage. Existing Home Sales therefore cannot be converted directly into purchase-mortgage originations. Loan size, financing share, application fallout, and cash purchases all affect that relationship.
Existing Home Sales is produced by NAR, a real-estate trade association. It is not a Census Bureau administrative count or a government survey. The Federal Reserve Bank of St. Louis republishes selected NAR series in FRED with source attribution and permission, but NAR remains the underlying producer.
NAR builds the monthly indicator from a representative sample of local Realtor boards and MLSs. The organization reviews submitted sales volumes, removes problematic observations, groups the data into four Census regions, and weights the remaining observations to estimate regional and national activity.
Potential data issues identified in NAR’s methodology include:
NAR states that its regional weights are periodically benchmarked to reflect shifts in sales activity. This design makes Existing Home Sales an estimate based on a changing reporting system, not a direct count of every U.S. transaction.
The release commonly presents several measures for all existing homes and selected property-type or regional components.
| Measure | What it describes | Main caution |
|---|---|---|
| Existing-home sales | Estimated completed transaction volume | Headline is annualized and seasonally adjusted |
| Single-family sales | Completed sales in the single-family component | Does not include condo/co-op transactions |
| Condo/co-op sales | Completed sales in the condo and cooperative component | National results can reflect concentration in particular markets |
| Housing inventory | Estimated existing homes available for sale at period end | A stock measure, not transaction flow |
| Months’ supply | Inventory relative to the current sales pace | Assumes the pace continues and inventory does not change |
| Median sales price | Price at which half of covered sales are above and half below | Mix-sensitive and not seasonally adjusted |
| Regional sales and prices | Estimates for four Census regions | Broad regions can conceal substantial local differences |
The accompanying release may discuss mortgage rates or supplementary market statistics. Readers should distinguish the core Existing Home Sales methodology from commentary and from other surveys cited in the release.
The headline sales total is usually a seasonally adjusted annual rate. NAR uses seasonal adjustment to reduce recurring calendar effects and annualization to express the adjusted monthly pace as a full-year rate.
If the seasonally adjusted monthly pace were 350,000 completed sales:
1Illustrative SAAR = 350,000 x 12 = 4,200,000 sales
The 4.2 million figure would describe the annual rate implied by that month’s adjusted pace. It would not mean 4.2 million homes closed during the month, and it would not be a forecast of the final annual total.
A simple formula such as unadjusted sales / (1 + seasonal factor) does not describe NAR’s published methodology. Seasonal adjustment is a statistical time-series process. NAR says it uses a Census Bureau X-13 variant to estimate and remove recurring seasonal patterns before annualizing the result.
The seasonal factors are not one fixed percentage that can be applied manually to every month. They can be revised as the model and recent data are updated.
Use seasonally adjusted rates for month-to-month comparisons. For year-over-year analysis, check whether the source uses adjusted or unadjusted values and keep the basis consistent. Annual totals represent estimated transactions during the year and should not be confused with the SAAR reported for a single month.
Existing-home inventory estimates the number of covered homes available for sale at the end of the reporting period. It is a stock. Existing-home sales is a flow of completed transactions during the period.
Months’ supply combines those two measures by asking how long current inventory would last at the current sales pace if no additional homes entered the market.
When sales are expressed as SAAR, the approximate relationship is:
1Months' supply = Inventory / (Annualized sales rate / 12)
For example, if inventory were 1.4 million homes and sales ran at a 4.2 million SAAR:
1Monthly sales pace = 4,200,000 / 12 = 350,000
2Months' supply = 1,400,000 / 350,000 = 4.0 months
This is a rate-based measure, not a promise that each home will sell within four months. New listings, withdrawn listings, price changes, buyer demand, and the composition of inventory continue to change.
Months’ supply can increase because:
Those patterns have different implications. More listings can improve buyer choice even if sales remain firm. A rising ratio caused mainly by falling closings may instead indicate slower market turnover. Inspect inventory and sales separately before interpreting the ratio.
The national median sales price is the point at which half of covered transactions sold for more and half sold for less. NAR also publishes medians for major regions and selected property types or metropolitan areas on its stated schedule.
Median price is not a constant-quality price index. It can move because:
NAR’s methodology states that its sales-price series is not seasonally adjusted. A raw month-to-month median comparison can therefore reflect both normal seasonal composition and underlying market movement.
For example, suppose sales of lower-priced starter homes fall because few owners list them, while higher-priced transactions remain steady. The national median can rise even if the value of a comparable home is unchanged. Transaction mix changed.
Use a House Price Index when the analytical objective is quality-adjusted or repeat-transaction price movement. Use median price when the objective is the midpoint of homes that actually sold in the period.
A pending home sale generally records a signed contract for an existing property before settlement. Existing Home Sales records the later completed transaction. The two series can differ because:
Pending sales can provide earlier information about contract activity, but they are not guaranteed future closings. Existing Home Sales is later in the process and confirms completed transaction volume.
The two similarly named releases use different sale dates.
| Feature | Existing Home Sales | New Home Sales |
|---|---|---|
| Publisher | National Association of Realtors | U.S. Census Bureau and HUD |
| Main property coverage | Previously owned single-family homes, condos, and co-ops | Qualifying new single-family houses built for sale with land included |
| Sale event | Completed transaction or closing | Signed contract or accepted deposit |
| Construction stage | Existing property has already been owned and occupied | Sale can occur before start, during construction, or after completion |
| Headline presentation | Seasonally adjusted annual rate | Seasonally adjusted annual rate |
| Price measure | Median existing-home sales price | Median and average new-house sales prices |
| Key risk in comparison | Different coverage and closing timing | Sample volatility, pre-permit sales, and contract cancellations |
New Home Sales can lead construction completion because it counts contracts. Existing Home Sales captures closings in the resale market. Combining their raw levels without reconciling methodology produces a misleading total.
| Indicator | Event measured | Position in the process |
|---|---|---|
| Mortgage applications | Application submitted to a participating lender | Before underwriting, funding, and closing |
| Pending home sales | Existing-home contract signed | Before settlement; some contracts fail |
| New home sales | Contract signed or deposit accepted for qualifying new house | Can precede construction and closing |
| Existing home sales | Existing-property transaction completed | Closing stage |
| Housing starts | Excavation begins for a new residential foundation | Physical construction stage |
| House price index | Price change under a defined index methodology | Valuation evidence rather than transaction count |
These measures can move in different directions without contradiction. Applications can rise before closings. Existing sales can fall while prices rise if inventory is limited and the transaction mix changes. Housing starts can increase even while resale activity declines.
Confirm whether sales are shown as SAAR, not seasonally adjusted monthly volume, or an annual total. Do not call an annualized pace the number of homes sold during the month.
The monthly rate provides recent direction after seasonal adjustment. The year-over-year comparison provides a wider reference point. Neither alone proves a durable trend.
Check single-family and condo/co-op components. Their price levels, geographic concentrations, financing, and supply conditions can differ.
Review the Northeast, Midwest, South, and West rather than assuming the national result is uniform. These are broad aggregates, not local substitutes.
Determine whether changes in months’ supply came from listings, closings, or both. Also consider whether low sales reflect weak demand, limited inventory, affordability constraints, or several forces at once.
Compare the median with repeat-sales or other quality-adjusted indexes. Do not infer that every home changed value by the median’s percentage movement.
Pending contracts and purchase-mortgage applications can provide context for future closings. Mortgage rates and credit conditions can affect both demand and transaction completion.
NAR revises seasonal factors and affected seasonally adjusted data annually. Confirm whether historical values were revised and retain the release date when conducting backtests.
Assume an illustrative release reports:
| Measure | Earlier comparison | Current result | Change |
|---|---|---|---|
| Existing-home sales, SAAR | 4.2 million | 4.0 million | -4.8% month over month |
| Inventory | 1.2 million | 1.3 million | +8.3% month over month |
| Months’ supply | 3.4 months | 3.9 months | +0.5 month |
| Median sales price | Prior-year level | Current level | +3.0% year over year |
The current months’ supply is approximately:
11,300,000 / (4,000,000 / 12) = 3.9 months
The first reading is that completed transactions slowed while available inventory increased, raising supply relative to the closing pace. The higher median does not disprove that slowdown. It may reflect limited supply in particular segments, actual price appreciation, or a shift toward higher-priced sales.
Before drawing a financial conclusion, an analyst should ask:
The evidence supports a statement about estimated national transaction pace and inventory. It does not establish the value of a particular house or predict the next release.
Existing-home closings are an important source of purchase-mortgage demand, but not every sale has a mortgage. Lenders should combine sales volume with applications, approval rates, loan amounts, cash-share evidence, and local market share before estimating originations.
When a mortgaged property is sold, the existing mortgage is generally repaid at closing. Existing-home turnover can therefore provide context for sale-related prepayments in mortgage portfolios and mortgage-backed securities. It is not a direct prepayment measure because some properties are debt-free, loan balances differ, and refinancing creates separate prepayment activity.
Transaction volume can affect demand for brokerage, title, escrow, appraisal, inspection, moving, and related services. Revenue effects depend on fees, market share, transaction value, operating leverage, and the exact business model.
Existing homes compete with new houses for many buyers. Low resale inventory can redirect some demand toward builders, while abundant existing inventory can increase competition. Relative price, location, condition, incentives, and completion time still determine substitution.
Sales volume provides evidence about market turnover. A slow national market does not automatically imply that a specific collateral property is illiquid, but local transaction scarcity can make comparable sales older or less representative and can increase valuation uncertainty.
Existing-home transactions can be influenced by:
The release does not identify the causal contribution of each factor. Falling sales can reflect weaker buyer demand, fewer homes offered for sale, failed contracts, affordability pressure, or overlapping causes.
Before using Existing Home Sales, verify:
Existing Home Sales data are educational market evidence, not personalized investment, mortgage, appraisal, legal, or tax advice. Check the latest source methodology and use local, property-specific, and transaction-specific evidence for financial decisions.