The NAR pending home sales index for February is up 0.8 percent to 83.2 after an unrevised 82.5 in January. The index was up for the third month in a row. The February reading is just below the up 1.0 percent consensus in an Econoday survey. Compared to a year ago, the index is down 21.1 percent. Recent moderation in mortgage rates and home prices have enabled some homebuyers to enter the housing market. Where buyers can find the right property on the right terms, they are committing to a home purchase. Pending home sales reflect contracts signed, but not closed.

All four regions have a month-over-month increase in pending sales, while all four regions are down compared to a year ago. The strongest activity is the 29.9 percent increase in the Midwest, followed by up 25.3 percent in the Northeast, 9.0 percent in the West, and 6.6 percent in in the South.

NAR Chief Economist Lawrence Yun said,"After nearly a year, the housing sector's contraction is coming to an end," said NAR Chief Economist Lawrence. He continued,"Existing-home sales, pending contracts and new-home construction pending contracts have turned the corner and climbed for the past three months."

Pending home sales in February are expected to rise 1.0 percent on top of January's 8.1 percent surge.

The National Association of Realtors developed the pending home sales index as a leading indicator of housing activity. Specifically, it is a leading indicator of existing home sales, not new home sales. A pending sale is one in which a contract was signed, but not yet closed. It usually takes four to six weeks to close a contracted sale.

This provides a gauge of not only the demand for housing, but the economic momentum. People have to be feeling pretty comfortable and confident in their own financial position to buy a house. Furthermore, this narrow piece of data has a powerful multiplier effect through the economy, and therefore across the markets and your investments. By tracking economic data such as the pending home sales index which measures home resales, investors can gain specific investment ideas as well as broad guidance for managing a portfolio.

Even though home resales don't always create new output, once the home is sold, it generates revenues for the realtor. It brings a myriad of consumption opportunities for the buyer. Refrigerators, washers, dryers and furniture are just a few items home buyers might purchase. The economic"ripple effect" can be substantial especially when you think a hundred thousand new households around the country are doing this every month.

Since the economic backdrop is the most pervasive influence on financial markets, home resales have a direct bearing on stocks, bonds and commodities. In a more specific sense, trends in the existing home sales data carry valuable clues for the stocks of home builders, mortgage lenders and home furnishings companies.

The National Association of Realtors moved up its publication schedule in 2011. Prior to 2011, the reference month was two months trailing the release date. In 2011, the reference month trails only by one month to the release month.