Real Estate Trends and Forecasts Key Terms

Use real estate trends and forecasts key terms to invest wisely in the market

In order to spot real estate trends and make forecasts, it's imperative that you understand key industry terms. The method for spotting trends and building forecasts requires a basic understanding of the definition and derivative of these terms. The housing market is subject to several factors, including mortgage rates, housing starts, vacancies, foreclosures and new building starts. Each of these items plays a factor in real estate trends and forecasting.

However, before you begin the trend and forecasting process, here are a few terms that can help you understand the process:

Pending home sales index

The pending home sales index comes out on the first of each month and shows the number of homes that's under a sales contract. This index is a leading indicator for anyone who wants to spot trends or make forecasts.

Primary mortgage market survey

The weekly primary mortgage market survey measures the average rates and fees for home sales nationwide. Freddie Mac is the sponsor of this survey, and the lower the rate, the more likely home buyers are going to take out loans to purchase a home.

Housing starts, vacancies and home ownership

Industry statistics that relate directly to housing forecast and trends are housing starts, vacancies and home ownership. Housing starts measure the number of new homes that companies throughout the U.S. are in the process of building. Vacancies and home ownership represent the percentage of total homes that are either vacant or occupied.
U.S. Census Bureau.

Case Shiller index

The Case Shiller index takes housing data from 20 major U.S. cities and compiles an index for real estate trend and forecasting.

Federal Reserve Board

The Federal Reserve Board sets the federal funds rate and uses resources to effectively manage or target the base interest rate. This rate correlates directly with the mortgage rate a person receives when purchasing a house. The higher the Fed pushes a rate, the lower the demand for housing loans.
Federal Reserve Board.

Foreclosure rate

The foreclosure rate is the pace at which houses in the U.S., region or city are under a repossession order. The higher the foreclosure rate, the lower the demand is for housing in the area.

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