Top U.S. Housing Market Indicators

Residential housing market activity contributes about 5% of the U.S. gross domestic product (GDP) each year. Whether you are an investor or a potential home buyer, there are certain key economic indicators that you'll want to watch over time to get a sense of the state of the market.

Construction Spending

The U.S. Census Bureau puts out a monthly report on new domestic construction spending activity, by dollar value. The report breaks out residential and nonresidential spending as well as private and public spending. It covers new construction and improvements to existing structures in both the private and public sectors.

The previous month’s activity and the previous year’s activity for the same month are available for comparison purposes.

The bureau has been doing this survey for more than 50 years.

Residential Construction

Another U.S. government report on new residential construction, or housing starts, focuses on residential construction activity nationwide by adding up the number of new permits issued and houses that builders have just started to work on.

There is a regional breakdown of the activity, as well as figures for the previous month’s and year’s activity.

Home Sales

The National Association of Realtors (NAR) provides an existing home sales report on the number of existing homes sold every month, as well as previous month and previous year input, for single-family houses, condos, and co-ops.

This report, based on actual home sale closings, also gives insight into inventory, prices, and regional sales performance.

State-Level Home Sales Reports

Various realtor groups in states with significant housing activity, such as California, Florida, Illinois, and Texas, put out periodic reports on sales activity and home prices in their respective states. These reports provide a more nuanced local-level market feel.

New Home Sales

A government report on new residential sales provides input on the number of new homes sold nationwide, based on sales contracts signed. It looks at the sales broken down by region and by various price points, such as sales under $150,000 and higher than $750,000.

Also, it looks at the inventory of new houses for sale and the median and average prices of houses sold.

Pending Sales

The National Association of Realtors produces a pending home sales index monthly report based on the number of purchase contracts signed by buyers of existing homes.

The report also gives a regional breakdown of pending sales activity and compares it to activity in the previous month and year.

The pending sales report gives a sense of the level of sales closings to expect in the next month or so.

NAHB’s Housing Market Index

The National Association of Home Builders (NAHB) puts out a monthly NAHB/Wells Fargo Housing Market Index that looks at the level of confidence that builders have in the single-family housing market.

By taking a monthly survey, the NAHB gets input on how home builders feel about the current level of sales and buyer traffic, as well as their sales expectations for the upcoming six months. 

The index provides regional input for the Northeast, Midwest, South, and West regions. 

Regional Price Indices

Several price indices provide valuable hints about buyer interest and general housing market optimism.

• Standard & Poor’s puts out its S&P/Case-Shiller Home Price Index looks at the national trend as well as prices in major metropolitan areas.
• The Federal Housing Finance Agency’s House Price Index tracks single-family home prices with input from Fannie Mae and Freddie Mac.
• CoreLogic, Inc. issues a home price index that looks at nationwide prices and measures the impact of distressed sales.

The Bottom Line

Whether you're considering buying or selling a home or investing in real estate, these key economic indicators are worth keeping an eye on. They'll give you a sense of the current state of the housing market in the U.S., and its likely direction in the months ahead.