Number of Existing Homes Sold in the United States from 2005 to 2022

Difference Between Existing Home Sales and New Home Sales

The difference between existing home sales and new home sales lies in the type of properties being transacted:

Existing Home Sales

Existing home sales refer to transactions involving previously owned or pre-existing homes. These are properties that have had at least one previous owner. Existing home sales are typically conducted through real estate agents or private sellers. The buyers of existing homes are purchasing properties that have already been constructed and lived in by previous owners.

New Home Sales

New home sales, on the other hand, involve the sale of newly constructed homes that have never been occupied before. These properties are typically sold directly by homebuilders or developers. New home sales often involve purchasing homes that are part of housing developments or newly constructed units in a specific area.

New home sales and existing home sales are typically released simultaneously each month. While comparisons are often made between the two series, it's important to consider the definition variances that impact the timing of these statistics.

The Census Bureau collects data on new home sales, defining them as sales contracts or deposits being accepted for houses at any construction stage: not yet started, under construction, or completed. Approximately 25% of sales occur upon completion, while the remaining 75% are evenly split between homes under construction and those not yet started.¹

Existing home sales data, provided by the National Association of Realtors, primarily reflect transactions closed with the majority involving mortgages. Since mortgage processing typically takes 30-60 days, existing home sales generally correlate to sales contracts signed a month or two earlier.²

Due to these definition differences, new home sales tend to lead existing home sales by a month or two when assessing changes in the residential sales market. For instance, an existing home sale in January likely involves a sales contract signed in November or December, considering the average time required for mortgage acquisition and closing.

To address this lagging effect, the National Association of Realtors introduced a monthly series called Pending Home Sales starting from January 2005. This series focuses on existing home sales where contracts have been signed but transactions are yet to be closed, aligning more closely with the definition of new home sales. Monthly estimates are presented as an index with 2001 set as the baseline at 100.0.