New Home Sales

New Home Sales (also called new residential sales) is a monthly economic indicator that measures sales of newly built homes in the United States. The U.S. Census Bureau publishes the data, which is used by economists, investors, and housing-market participants to gauge demand in the residential construction sector and to read signals about broader economic trends.

Key takeaways

• New Home Sales measure purchases of newly built homes and are published monthly by the U.S. Census Bureau.
• Data is reported both seasonally adjusted (annualized) and not adjusted (monthly) and is available at national and regional levels.
• The series is considered a lagging indicator of housing demand but is closely watched for signs of economic expansion or contraction and for its influence on mortgage markets.
• Results are estimated from a representative sample and are subject to revisions and sampling error.

What the series measures

New Home Sales counts newly built housing units when a deposit is taken or a purchase contract is signed during or after the year the home was constructed. The Census Bureau reports:
* A seasonally adjusted, annualized figure (removes predictable seasonal patterns to highlight underlying trends).
* A non-adjusted monthly figure (raw monthly count).
Both versions include breakdowns by region and for the nation as a whole.

How the data are collected

The Census Bureau compiles New Home Sales using:
* Surveys of home builders and construction activity.
* Building-permit information from the Survey of Construction.
Because the series is estimated from a sample of transactions rather than every sale, standard sampling and statistical techniques are used, which introduce a modest margin of error. The Bureau publishes periodic revisions as more information becomes available.

Main drivers

New Home Sales are influenced by:
* Interest rates and mortgage availability — lower rates typically boost demand.
Household income and employment — higher incomes and low unemployment support purchases.
Housing supply factors — availability of lots, materials, labor, and permitting.
* Changes in consumer preferences (e.g., demand for starter homes vs. larger family homes).

How to interpret the data

• Lagging but informative: Because construction and purchase decisions take time, New Home Sales often lag other indicators, yet movements can confirm shifts already underway in the housing market.
• Leading signals for related markets: Persistent declines may presage slower economic activity or rising mortgage rates; sustained increases can indicate strengthening demand and recovery.
• Use alongside other metrics: Pair New Home Sales with housing starts, existing-home sales, homebuilder inventories, the absorption rate, and mortgage rate trends for a fuller picture.
• Expect revisions: Monthly estimates can be revised as new information arrives; treat single monthly changes cautiously and focus on trends over several months.

Practical implications

• For buyers and sellers: Rising new-home sales can tighten inventories and put upward pressure on prices; falling sales can increase negotiating leverage.
• For builders and suppliers: Sales trends guide production planning, staffing, and materials purchasing.
• For policymakers and investors: The series provides insight into consumer demand, construction sector health, and potential impacts on employment and inflation.

Summary

New Home Sales is a monthly, Census Bureau–published indicator of purchases of newly built homes. It’s useful for understanding housing demand, anticipating momentum in the construction sector, and spotting shifts in the broader economy. Interpretations should account for seasonal adjustment, sampling variability, and the series’ lagging nature; best practice is to evaluate it together with other housing and macroeconomic indicators.