Question on existing house sales vs new home starts

[T Roosevelt]

Seems I heard last week that new home starts were down, and that's bad news, but today I hear that existing home sales are up, and that's great news.

My question is - which one trumps the other? Seems that it is better for new homes to be bought, rather than turning over existing home inventory. Basically people are just trading homes.

And doesn't it logically follow that if people aren't buying new homes, then they are buying existing homes, and the real gauge is just how many are being bought?

[The Straight Story]

1. well, some would say it is good because it saves trees

And there is less development :) I guess it just depends on which lense you're wearing when you look...

[tritsofme]

2. Only new home sales

are counted in GDP.

More new home sales means more economic growth.

[T Roosevelt]

3. But are existing home sales an indication of the economy's status?

Do increased existing home sales bode well?

[bonddad]

4. Both are important, but mean different things

New home construction also implies a larger increase in construction spending and home appliances.

Existing home sales imply improvements, but to a far lower degree.