what are new home sales 
new home sales also known as new residential sales is an economic indicator published monthly by the u s census bureau that measures sales of newly built homes 1 understanding new home salesnew home sales is monitored closely by investors because it is viewed as a lagging indicator of real estate market demand and therefore a factor impacting mortgage rates it is driven by factors such as household income unemployment and interest rates the u s census bureau publishes two versions of the new home sales measure the seasonally adjusted figure and a non adjusted figure the adjusted figure which adjusts for seasonal factors such as the weather is shown as an annual total while the non adjusted figure is shown as a monthly total these figures are given for different regions and for the country as a whole 2 new home sales data and other internal metrics such as the absorption rate are closely monitored by market participants as changes can be predictive of broader movements in the economy such as the onset of a recession or the beginning of an economic recovery the data for the new home sales measure is compiled by conducting interviews with home builders and by looking at data from the u s census bureau s survey of construction specifically it uses data regarding building permits issued for new construction projects a new home is included in the measure if a deposit was paid for the purchase of that home or if a contract to purchase the home was signed within or following the year of its construction 3 the seasonally adjusted figures are intended to remove the effect of factors such as seasonal weather or the overall business cycle the idea behind seasonal adjustments is to give market participants a clearer sense of the underlying demand for new homes independent from other factors affecting the economy to help maintain data quality ongoing revisions are made and published as new data becomes available given the vast amount of transactions occurring throughout the economy the census bureau relies on statistical techniques and sampling methodologies to estimate new home sales data from a small portion of total transactions as with any statistical method these procedures create a modest margin of error which is included with the monthly reports new home sales data interpretationfinancial publications report on new home sales data and often provide interpretations of that data for readers following market news for example the wall street journal reported in july 2019 that purchases of single family homes increased by 7 relative to the previous month a good sign following two months of declining sales 4in interpreting these results the journal quoted experts who attributed the positive results to increased demand for lower cost starter homes which they attributed to low unemployment growing household incomes and low interest rates 