US New Home sales index and Its Impact on the Forex Market

US New Home sales index report

Release Date New Home sales Change (in thousands) Forecast  (in thousands) Previous (in thousands) Market Reaction
26/6/2024 619 636 698 Negative
23/5/2024 634 677 665 Negative

What is the New Home Sales Index in the United States?

The US New Home Sales Index is an indicator that measures the number of new homes sold in the United States during a given time period. This indicator is issued by the US Department of Commerce in cooperation with the US Federal Reserve Bank.

The new home sales index is calculated by tracking the number of new homes that were sold in the United States during a specific period of time. These homes include buildings that were built recently and have not been sold before. Higher costs, such as homes designed with solar energy technologies or environmentally friendly homes.

When the sales release is greater than expected it means:

Higher demand for homes: indicating higher consumer confidence and continued economic growth.

Increasing the confidence of real estate developers, which pushes them to build more new units.

A warning sign: If the increase in sales is the result of heavy incentives or discounts, this could indicate the beginning of a decline.

Reflection on the economy: The real estate and home construction sector has a significant impact on the GDP and job opportunities.

If the US New Home Sales release is lower than expected, that means:

Low demand for homes: May indicate lower consumer confidence and slower economic growth.

Weak confidence among real estate developers, which may push them to build fewer new units.

An early warning of the beginning of a decline in the real estate market: sales decrease before prices decline.

Implications for the Economy: Declining new home sales indicate a slowdown in the real estate and construction sector – an important part of GDP.

How does the new home sales index in the United States affect the trading of the US dollar in the forex market?

There are several ways the US New Home Sales Index affects dollar trading in the forex market:

The index reflects the state of the US economy: the real estate sector accounts for a large part of the GDP. If sales increase, this will enhance the strength of the dollar.

Helps forecast monetary policy actions of the Fed: Economic activity plays a role in interest rate decisions.

It affects the income of American companies: As the real estate sector is an important sector, the more home sales increase, the higher the corporate profits.

Affects confidence in the labor market: Strong sales indicate an improvement in the labor market and an increase in salaries.

Affects capital flows: An increase in home sales may attract investors to the US market.

Therefore, any changes in this indicator may lead to a change in the strength of the dollar and an acceleration of trading in the dollar.

The agency responsible for issuing the new home sales index in the United States

The US New Home Sales Index is released by the US Department of Housing and Urban Development (HUD) in cooperation with the US Department of Commerce’s Census Bureau.

Monthly sales of new homes are monitored across the country through questionnaires distributed to sellers and developers. This data is collected, analyzed and published by the Ministry of Housing and Urban Development.

The release date of the US Retail Sales Index

The index is released in the last days of each month to assess the previous month’s sales. It measures the number of new home units sold during the month, as well as the median home price.

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