What are new-home sales and why do they matter to the economy?

Upcoming week we have two important major events happening for the U.S, one of them is the new-home sales. But what exactly are new-home sales, and why do they matter? In this post, we'll break down what new-home sales are and explain why they're so important to the overall health of the economy. You also be more prepared and informed why the market moved in a certain way. Lets move on...

What are new-home sales and why do they matter to the economy?

New-home sales are a measure of trading activity in the market for newly built homes. The new-home sales data are important leading indicators of economic activity, providing timely information on changes in the demand for new homes, which directly affects decisions regarding investment, production, and employment. The data on new-home sales also provide valuable information on the market fundamentals that are shaping trading conditions in the market for newly built homes. The data can be used to inform decision-making about pricing, product mix, and other strategic considerations. In addition, the data can be used to assess market conditions and identify emerging trends. As such, new-home sales data are an important tool for monitoring and understanding the health of the economy.‍

See historical graph here:
fred.stlouisfed.org/series/HSN1F

Impact of new-home sales
When new-home sales activity levels rise, it has a positive impact on the economy as a whole. For consumers, this increased activity level leads to currency being put back into circulation. When builders see an increase in new-home sales, they are able to reinvest that currency into building more homes, which in turn provides more jobs for other industry players. The increased activity also has a positive impact on the stock market and it's currency, as builders and other companies who stocks are traded publicly see their stock prices increase. This provides more stability in the markets and can lead to more investors feeling confident about putting their money into the markets. Ultimately, when new-home sales activity levels increase, it provides a boost to the economy as a whole.‍

New-home sales are an important economic indicator because they signal overall consumer confidence and spending. Increased new-home sales activity levels have a ripple effect throughout the economy, benefiting consumers, builders, and other industry players. We shall see what impact the new-home sales will have this week on EURUSD.

We can currently see we are stuck in a range between support and resistance - let's see what the week will bring.

Trade safe around these hours! Cheers.