Why is this important?
New listings indicate the number of residential properties newly publicly listed for sale, and can be a sign of strength in the housing market. Willingness to sell a home indicates that homeowners may expect an increase in value since the time of purchase, translating into wealth creation from generated equity. Housing turnover is also stimulated by incomes rising relative to housing prices and by lower mortgage interest rates which encourage borrowing [i].
While wealth creation from the sale of a home is an opportunity for sellers, in a market with low inventory, many would-be sellers are hesitant to list their homes and enter the buying market [ii]. Conversely, an increasing number of new listings indicates that sellers are willing to enter the buying market themselves and may be expecting appreciation.
[i] Stutely, Richard. Guide to Economic Indicators: Making Sense of Economics. London: Economist Books, 2006.
[ii] Ramirez, Kelsey. “Here’s Why the Housing Market Continues to Struggle with Low Inventory.” Housingwire. 18 April 2017. Web. 28 June 2017. <https://www.housingwire.com/articles/39890-heres-why-the-housing-market-continues-to-struggle-with-low-inventory>.