The housing sector often leads the overall health of the economy. Home sales are major expenditures, usually requiring either substantial savings or long term financing. This makes home sales a gauge of consumer and corporate optimism, as homes are purchased when the economic outlook is bright and consumers have more disposable income.

Addition, home sales are typically accompanied by purchases as consumers renovate, decorate, and furnish their homes. This spurs additional demand for goods, multiplying the consumption effect of home purchases.

Consequently, the housing sector tends to lead the economy, showing robust growth at the start of economic expansion and slowdown at the onset of a recession.