If you want to buy a home but you're holding out until market conditions show signs of improvement, housing indicators can help point the way. There are dozens of economic indicators, and many of them relate to the housing market in some way. Here are four of the most important ones.

TUTORIAL: Economic Indicators: Housing Starts

Housing Construction
Housing starts are one of the three statistics (along with building permits and housing completions) that make up the U.S. Census Bureau's New Residential Construction report. A housing start occurs when construction workers begin laying the foundation for a new residence. In May 2011, housing starts increased by 3.5% over April 2011, but were 3.4% below May 2010 levels.

By comparing housing starts for the current period to housing starts from previous periods, we can learn something about the demand for new housing. Housing starts are a leading indicator, meaning that they foreshadow what is possibly going to happen in the economy. If construction is increasing, economic activity may be picking up. If it is decreasing, the economy may be slowing down. (For related reading, see Leading Economic Indicators Predict Market Trends.)

New Home Sales Data
Another report from the U.S. Census Bureau called New Residential Sales reports the number of new single-family homes that are sold each month and how these numbers compare to those for one month and one year prior. In May 2011, seasonally adjusted new home sales decreased 2.1% from April 2011 but increased 13.2% from May 2010.

The report also states the number of months' supply of new homes on the market and the median and average sales prices for new homes sold. For both the housing market and the broader economy, an increase in new home sales is a positive sign, while a decrease in new home sales is a negative sign. A glut of unsold new homes is also a bad sign.

Price Indexes
Case-Shiller's home price indexes are the most widely respected data sources for home price levels. Two monthly indexes, the 10-City Composite Index and the 20-City Composite Index, use what is called the "repeat-sales method" to compare how the sale prices of the same single-family detached residences change each time they are sold. The data have a two-month time lag because they are time-consuming to compile.

Increasing sales prices show rising demand and a strengthening economy; decreasing prices show declining demand and a weakening economy. The June 2011 release showed that prices had increased in both the 10- and 20-city composites since March, but they had decreased slightly compared to the previous year. (To learn more, read Understanding The Case-Shiller Housing Index.)

Mortgage Delinquencies
The Mortgage Banker's Association (MBA) publishes a quarterly report called the National Delinquency Survey that provides data on mortgage delinquency and foreclosure rates by mortgage type. The survey collects data from 120 lenders and represents about 85% to 88% of mortgages.

The results for the first quarter of 2011 indicated an 8.32% delinquency rate, a slight increase from the previous quarter but a decrease from one year ago. As well, 1.08% of loans had entered foreclosure. According to the MBA, loss of income is the main reason people fall behind on their mortgage payments. Thus, the delinquency survey tells us about the overall state of the economy. Also, if high numbers of borrowers are behind on their mortgage payments, foreclosure numbers could rise and depress housing prices. (For more on foreclosures, see The Pitfalls Of Buying A Foreclosure House.)

Finding the Data
You can usually run across these statistics in the news whenever new data is released, but if you want to go straight to the source, the easiest way to get the data is to read the latest press release (sometimes called a "news release") that the data-compiling entity issues along with the new data. If you're highly analytical, you can also examine the detailed tables that list the new data and compare it to recent data. The census data and Cash-Shiller data are free. The MBA survey is not free, so you can't access the data directly unless you're willing to pay for it, but the press releases that summarize and analyze the results are publicly available.

You can also view a summary of recent housing indicator data in Standard and Poor's monthly Residential Real Estate Indicators reports. The monthly Economic Outlook report published by Freddie Mac also contains valuable data and analysis about the performance of the housing market and the broader economy in a readable, user-friendly format.

TUTORIAL: Economic Indicators: Existing Home Sales

Be Your Own Analyst
Instead of listening to pundits' predictions of when the market will recover or when it will be the right time to buy, you can look at the data yourself and make your own assessment. That being said, unless you're buying real estate purely as an investment, market conditions are just one of several factors that should influence if and when you decide to buy. (For related reading on housing, see Why Housing Market Bubbles Pop.)

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