The NAR pending home sales index is up 0.9 percent in July to 77.6 after a negligible revision higher to 76.9 in June. The July increase is above the consensus of down 0.4 percent in the Econoday survey of forecasters. The increase reflects higher contract signings of 2.0 percent in the South and 6.2 percent in the West, while there are decreases of 5.8 percent in the Northeast and 0.4 percent in the Midwest.

"The small gain in contract signings shows the potential for further increases in light of the fact that many people have lost out on multiple home buying offers," said NAR Chief Economist Lawrence Yun."Jobs are being added and, thereby, enlarging the pool of prospective home buyers. However, rising mortgage rates and limited inventory have temporarily hindered the possibility of buying for many."

The average Freddie Mac rate for a 30-year fixed rate mortgage rose to 6.85 percent in July after 6.70 percent in June, and above 5.41 percent in July 2022.

Pending home sales in July, which in June rose 0.3 percent, are expected to fall 0.4 percent.

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.