The Difference Between Home Sales and Prices

The number of home sales is not a very useful metric without context.

I’ve heard a lot about home sales being down in the news this year. Most people would likely think that’s a negative thing, but it’s more complicated than that. Today I want to dive deeper and talk about the difference between home sales and home prices as metrics.

"Home sales and home prices are very different."

When home sales are down, it means that fewer homes sold during the last month compared to the same month last year. Fewer sales could be the result of fewer sellers listing their homes. It could also be because there are more homes for sale, and fewer people are buying them. Despite those being completely opposite scenarios, they both result in home sales being down. As you can see, saying that home sales are down doesn't really tell us very much.

Home sales and home prices are very different. If the average price of homes in a certain area were down, that would be a big deal and something we don't want to happen unless you're buying. It's just important to keep in mind that these real estate headlines, like a lot of news headlines, are sensationalized to generate interest. I encourage everyone to be an informed consumer of information and think harder about what the news means.

If you have any questions, don’t hesitate to reach out to me by phone or email. I look forward to hearing from you.