Existing Home Sales

The housing market is divided into two main categories: new home sales and existing home sales.

Of course, all houses "exist" in the metaphysical definition of the term. It's not like part of the market involves fictional homes (a real estate agent getting a listing for the House of Usher maybe, or Gatsby's West Egg estate). The distinction between new and existing homes comes from whether the house had a previous owner or not.

If you move into a house that was newly-built for you (no previous owner), it represents a new home sale in the economic stats. If you buy a house where someone else lived before, it's an existing home sale.

The stats on U.S. existing home sales are released monthly by the National Association of Realtors (stats on new home sales come from the government). Existing home sales make up the largest share of the housing market by far, since most people buy a home previously owned by someone else, rather than building it from scratch.

However, a single new home sale is considered to have a larger overall economic impact than a single existing home sale. The new home sales involve things like new materials, wages for laborers to make them and the necessary purchase of all the appliances that go into a house (furnace, washing machine, refrigerator, etc.). Thus, existing home sales are seen as a good indicator of housing demand, while the stats on new home sales are considered to have broader economic implications.