Home sales is good for the economy and currency 1



Good day,

have you ever heard news about how good and bad home sales are and how important the figure is? Do you know that home sales is important to forex trading?

Today in another of my Forex Education article, i attempt to explore on why home sales is good for the economy and currency of the country and hence it’s importance.

Hopefully you can benefit from my forex self learning articles.

Now, have you or ever seen someone bought a house?

The processes, the renovation, the loans . . .

Basically a house you see on the street goes through many phrases to become what it is today. Along the way it generates business for many small, medium and even big companies.


Looking at the illustration above, you can see that i have divided the process into Back Business, Middle Business and Front Business.

Back Business
These are the basic services required to start building a house. The raw materials like wood and metal. Wholesales for finished materials or even the planing and design companies for the plot.

Middle Business
Once the materials and plans are ready, construction can begin! Workers are needed, machines used. Once the basic frame is constructed, in comes the renovation companies for the flooring, the landscaping, etc. Not forgetting the pipes, the basins etc needs to be fitted too.

Front Business
There we have it now, a house ready for a family to move in. Housing agents are involved in the transactions. Loans are needed and finally the consumer goods required for comfortable living.

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The 3 segments above basically sums up the back to front process of a house in the making. Simplified of course but useful to know and understand.

Now that we know home sales is a business generating activity, we can assume that it probably creates more demand for goods and of course jobs! These 2 factors are important for sentiments as we all know.

Ok, we have business generation and positive sentiments. Conclusion?

Probably increased foreign investments and hence demand for the country’s currency!

I hope today’s article helped shed some light for you with regards to home sales and why is it so important to forex.

Trade Safely!

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  • Pete

    Thank you. This helped my understanding!