Most housing headlines report closed sales. How many homes sold last month, and for how much. That is real information, but it is old information by the time you read it.
If you want to know where the Greater Lafayette market is heading, you need three numbers side by side: new listings, pending sales, and closed sales. Each tells you something different, and only one of them comes close to telling you about right now.
The three numbers, defined
New listings are homes that came on the market during a period. This is supply arriving.
Pending sales are homes that went under contract during a period. A buyer and seller agreed on terms, and the deal is working toward closing. This is demand showing up.
Closed sales are homes that finished the process and transferred ownership. The keys changed hands and the price became a matter of record.
Different MLS systems handle the in-between statuses a little differently, especially contingent deals that are under contract but still have conditions to clear. I explained those labels in listing statuses explained.
Which numbers lead and which lag
Closed sales lag. A home that closes this month usually went under contract weeks earlier, and the price was agreed before that. By the time a closed sale shows up in a monthly report, it reflects buyer decisions made in an earlier market, sometimes in a different rate environment.
Pending sales lead. They capture the moment a buyer commits. When pendings rise or fall, closings tend to follow in the weeks after. If you only watch closings, you will always be reacting to last season.
New listings are a leading signal on the supply side. They tell you how many sellers decided to enter the market. Watching them next to pendings tells you whether buyers are absorbing what comes on or letting it stack up.
This is why the National Association of REALTORS publishes a Pending Home Sales Index and describes it as a leading indicator. Contract activity comes before closings, so it shows a turn in the market sooner.
Reading them together
The real signal is in the relationship between new listings and pendings.
Pendings keeping pace with or outrunning new listings. Buyers are taking homes off the market about as fast as sellers put them on. Inventory stays tight or shrinks. Sellers hold the stronger hand, and well-priced homes move quickly.
New listings outrunning pendings. Supply is arriving faster than buyers are committing. Inventory builds. Market time stretches, price reductions become more common, and buyers get more room to negotiate.
Both rising together. A busy market. More choice for buyers and more buyers for sellers. Common in spring.
Both falling together. A quiet market. Common late in the year, and not necessarily a sign of weakness.
That relationship is the engine behind inventory, which I unpacked in what housing inventory means here, and behind the question of whether it is a buyer's or seller's market.
Seasonality will fool you if you let it
Greater Lafayette has a strong seasonal rhythm. New listings and pendings both tend to climb in spring, stay busy into summer as buyers aim for the start of the school year and the Purdue calendar, and taper through fall and winter.
That means comparing this month to last month mostly tells you about the calendar. Comparing this month to the same month last year is more honest. Comparing several years of the same month is better still.
When someone tells me pendings dropped, my first question is compared to when.
Small numbers swing hard
Our market is not huge. In a single price range, a single town, or a single month, the counts can be small enough that a handful of deals moves the trend.
That is why I watch these numbers by price bracket and over rolling periods rather than one month at a time. The entry-level market and the upper end can be in very different conditions in the same month, and a county-wide total hides that completely.
Signals beyond the big three
A few other measures help me read new listings and pendings more clearly.
Price reductions. When more active listings carry a price cut, sellers are pricing ahead of buyers.
Back on market. More deals falling apart can mean buyers are getting nervous, financing is getting tighter, or inspections are turning up more.
The list-to-sale relationship. How final prices compare to asking prices tells you who is winning the negotiation. More on that in the list-to-sale price ratio.
Time to pending. How quickly new listings go under contract is often the earliest shift I notice, before any monthly report picks it up.
What a shift looks like before the headlines catch it
Here is the pattern I watch for. New listings in a price range start to tick up the way they always do in spring. Pendings keep pace for a few weeks, then quietly stop keeping pace. Showings feel a little thinner. Homes that would have gone under contract over a weekend now take a couple of weeks.
At that point the closed sales report still looks strong, because it is reporting deals written a month or two earlier. Anyone reading only closings would say nothing changed. Anyone watching pendings and new listings together already knows the next few months will feel different.
The same thing works in reverse. After a slow stretch, pendings often firm up before prices do. Buyers who were waiting come back, the best-priced homes start moving faster, and only later does the closed data confirm it. Catching that turn early is worth a lot to a seller deciding when to list and to a buyer deciding how hard to push.
What buyers should do with this
If pendings are running hot relative to new listings in your price range, expect competition. Get fully pre-approved, know your numbers, and be ready to tour and write quickly. The right homes will not wait for a second weekend.
If new listings are outrunning pendings, take a breath. You likely have more time, more choice, and more room to ask for repairs or concessions. Use it to be thorough, not to drag your feet on the right house.
What sellers should do with this
If pendings are strong and inventory is thin in your bracket, a well-prepared, correctly priced home can draw strong interest early. That is not a license to overprice. Buyers still compare.
If new listings are piling up, price and presentation matter even more. You are competing with more homes for fewer committed buyers, and the homes that stand out are the ones that sell.
Tracking it yourself
You do not need to be an agent to watch these numbers. Local and state REALTOR association reports and national releases cover them. Just check what area and time period each source uses before you compare one to another. I walked through how in how to track the Lafayette market yourself.
What the numbers cannot show
Here's what's happening behind every monthly count. Pendings tell you a deal was signed. They do not tell you that several offers came in on a house, or that the buyer waived a contingency to win, or that two more sellers on the same street are getting ready for spring.
You can find listings anywhere. What you cannot find in a report is what is coming to market next week and how buyers are behaving at the table right now. That local knowledge is what actually protects you when you decide when to move.
If you want a read on what these signals mean for your price range and your timing, grab a time on my calendar and we will look at the numbers that actually apply to you. No pressure either way.