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I've often said that existing homes sales isn't really a good indicator when evaluating the economy.

The contribution to the overall economy is mute, at best. But it does have some telling element in the overall real estate economy (click to enlarge):

existing homes

There is a correlation between existing and new homes sales. Both have been trending downward. But, the scale of the move downward in new homes is smaller. However, the growth in new homes sales have moved much higher than the existing homes sales:

new homes

Why not? Why buy a used home when you can get the custom home of your dreams at easy financing and no down payment? And, you don't have to walk in and do any real kind of maintenance of upgrades. The push for new homes makes a lot of sense.

So, I largely discount this release. But, I felt I'd put the chart up anyways. Tomorrow we get the new homes sales data. If there's any kind of stabilization, then I think the dollar will rally in light of moderate strength.

Source: Eye On Existing and New Home Sales