The NAR pending home sales index is down 5.2 percent to 78.9 in March from an unrevised 83.2 in February. The decrease is below the consensus of up 0.4 percent in an Econoday survey. NAR Chief Economist Lawrence Yun pins the blame on the supply of homes for sale. He said,"The lack of housing inventory is a major constraint to rising sales." He continued,"Multiple offers are still occurring on about a third of all listings, and 28 percent of homes are selling above list price. Limited housing supply is simply not meeting demand nationally."

However, Yun forecasts:"Sales in the second half of the year should be notably better than the first half as job gains continue and more favorable mortgage rates are expected." The NAR anticipates that the 30-year rate for a fixed rate mortgage will fall to 6 percent by the end of 2023, and 5.6 percent in 2024.

Pending home sales in March are expected to rise a further 0.4 percent after climbing 0.8 percent in February that followed January's sharp 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.