The NAR's pending home sales index for February is up 1.6 percent to a reading of 75.6 after a negligible upward revision to 74.4 in January. The index is 7.0 percent below 81.3 in February 2023. The February percent change is a little above the consensus of up 1.3 percent in the Econoday survey of forecasters.

NAR Chief Economist Lawrence Yun said,"While modest sales growth might not stir excitement, it shows slow and steady progress from the lows of late last year." He added,"Ongoing job gains are clearly increasing demand along with more inventory."

Consumers appear to be more resigned that mortgage rates are not going to fall much in the near future and that the historic lows seen in 2020-2021 in the wake of the pandemic. However, consumers are sensitive to even small movements in mortgage rates that can shave off or add to monthly mortgage payments. For the moment, mortgage rates have come down below the 7 percent-mark that chilled homebuying in much of the second half of 2023. February contracts reflect mortgage rates locked in mostly in January. The monthly average rate for a Freddie Mac 30-year fixed rate mortgage was 6.82 percent in December, slipped to 6.64 percent in January, and rises to 6.81 percent in February. For March to-date, the rate averages at 6.83 percent.

Pending home sales in February, which in January fell 4.9 percent after jumping 5.7 percent in December, are expected to rise 1.3 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.