There are a lot of factors that play a role in the health of the housing market. To know where the market is headed, you must have an idea about where mortgage rates and prices are headed and how many new homes are being built. You should also take a look at how many active listings there are and how interested home buyers might be.
Beyond those factors, there are things like economic concerns, consumer confidence, and the job market which also have an effect. In other words, it’s a complicated mix. In order to really understand it, you have to look at the bigger picture. Take home sales, for example. They are a commonly cited statistic but, without context, they don’t mean much.
National Association of Realtors’ chief economist, Lawrence Yun, explains one way that today’s numbers can be put in better perspective. “Home sales in 2018 look to close out the year with 5.3 million home sales, which would be similar to that experienced in the year 2000,” Yun says. “But given the 17 million more jobs now compared to the turn of the century, home sales are clearly underperforming today. That also means there is steady longer-term growth potential.” In other words, though sales may have disappointed this year, when put in perspective they actually look poised for growth.