The NAR's pending home sales index for March is up 3.4 percent to 78.2 after an unrevised 75.6 in February and is essentially the same as the 78.1 in March 2023. The increase is about the consensus of up 1.0 percent in the Econoday survey of forecasters.

NAR Chief Economist Lawrence Yun said,"March's Pending Home Sales Index … marks the best performance in a year, but it still remains in a fairly narrow range over the last 12 months without a measurable breakout." He continued,"Meaningful gains will only occur with declining mortgage rates and rising inventory."

While homebuyers signed more contracts in March, it does not mean that all those contracts will be closed in April or May. Affordability remains an issue for both buyers and lenders and could affect final decisions for closing a sale. The average rate for a Freddie Mac 30-year fixed-rate mortgage rose to 6.81 percent in February and was little changed at 6.82 percent in March. While this is below above 7 percent rates seen back in August-November 2023, the rate is still a factor for potential homebuyers at a time when home prices remain elevated. Nonetheless, with rates once more cresting the 7 percent mark, homebuyers will be more inclined not to walk out of current contracts.

Pending home sales in March, which in February rose 1.6 percent after falling 4.7 percent in January, are expected to rise 1.0 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.