The NAR pending home sales index is unchanged in November from October at 71.6, and down 5.2 percent compared to a year ago. The November change is below the consensus of up 0.8 percent in the Econoday survey of forecasters. Potential homebuyers are likely cautious while prices remain elevated for existing homes and supply low, affecting home affordability. NAR Chief Economist Lawrence Yun said,"Although declining mortgage rates did not induce more homebuyers to submit formal contracts in November, it has sparked a surge in interest, as evidenced by a higher number of lockbox openings."

The Freddie Mac average rate for a 30-year fixed rate mortgage was 7.65% in October and 7.44% in November. For December to-date, the average rate is below 7 percent for the first time since July. Potential home buyers may be waiting to see if rates decline any further and/or if improved supply gives homebuyers any leverage in negotiating prices.

Pending home sales in November, which in October fell 1.5 percent, are expected to rebound 0.8 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.