National economy is a key factor which determines the way a country is performing its wealth. There are various tools that can be used to read the economy. Amongst those various tools, there are two fundamental indicators which can be used to gauge the economy. They are existing and new home sales indicators.
The existing home sales indicator measures the number of yearly existing residential buildings that were traded during prior month. This report assists to assess how strong the housing market in the U.S. and is a main key of the whole economic strength.
If the existing home sales indicator measures the number of the existing residential buildings, the new home sales indicator measures the number of new ones that were sold in the United States. This indicator shows the level of market consumption in the housing sector. The report is calculated from the number of new residential building contracts which have been signed. In the U.S., buyers have to pay for the renovation and finishing costs of the buildings. So, if the housing demand is increasing, it will cause the increase in good, service, and employment sectors also.
In the United States, the new home sales report is published by The Central Bureau on the last Thursday, at 10.00 p.m. of every month. This report is typically calculated from the number of on-processed residential buildings.
The new home sales indicator is the main key that control instability of other housing variables. The reason is because this indicator is used to confirm the housing trend whilst still be able to predict consumer’s expenditure. Indeed, buying a new house needs lots of money. When they decide to buy a new one, we can say that they have enough savings and are optimistic with their future financial power. The increase in the new home sales number in a particular country will affect consumer spending which will lead to the increase in GDP. And if the GDP is growing, it will rise up market and investor response and it finally makes the currency of that country gets stronger.
In the period of slow economic growth, the new home sales indicator can also be used to determine the economic recession. It reflects the changes in the number of the finished residential buildings and those which are booked by customers.
Well, it’s end of our discussion about the existing and new home sales indicators. I hope you’re getting a useful information and knowledge for your trading. Enjoy your day, and happy trading in PAMM Investments !
Don’t forget to read this important article for PAMM trader
1. How to become a PAMM Trader
2. Understanding your Forex Trader Level as PAMM Trader