Understanding which economic indicators drive the housing market helps you make better-informed decisions about when to buy, sell, or invest. Here are the key data series every serious real estate participant should follow.
National Indicators to Watch
- Existing Home Sales (NAR): Monthly — measures closed sales of previously owned homes. Rising sales signal demand; falling sales signal softening.
- New Home Sales (Census Bureau): Measures new construction sales — a leading indicator of builder confidence and housing supply pipeline.
- Housing Starts & Permits (Census Bureau): Building permits are the best leading indicator — permits are filed before construction starts.
- Case-Shiller Home Price Index: 20-city composite measures annual home price changes. Published monthly with a 60-day lag.
- MBA Mortgage Application Index: Weekly data on purchase and refi applications — a leading indicator of near-term sales activity.
- 30-Year Fixed Rate (Freddie Mac): Published weekly — the benchmark rate that directly drives affordability.
Local Indicators
- Job growth: Markets with above-average employment growth historically outperform in home prices.
- Population migration: Net in-migration drives housing demand. Census Bureau and IRS migration data track this.
- Permit activity by city: High permit activity → future supply increases → potential price moderation.
- Foreclosure and delinquency rates: Rising delinquencies are an early warning of future distress.
Where to Find This Data
National Association of Realtors (nar.realtor), Federal Reserve (fred.stlouisfed.org), and the Census Bureau (census.gov/housing) publish all this data for free. FRED has an excellent charting tool that lets you overlay multiple indicators.