The NAR's pending home sales index is down 7.7 percent in April to 72.3 after a negligible upward revision to 78.3 in March. The index is down 7.4 percent compared to a year ago. The Econoday survey of forecasters has a consensus of up 0.3 percent for April. Higher mortgage rates in April sapped buyers' readiness to commit to a purchase.

NAR Chief Economist Lawrence Yun said,"The impact of escalating interest rates throughout April dampened home buying, even with more inventory in the market."

Affordability remains an issue for buyers as they are sensitive to how even small changes in rates affect monthly mortgage payments while home prices continue to rise. The average rate for a Freddie Mac 30-year fixed-rate mortgage rose to 7.04 percent in April from 6.82 percent in March. Rates at or above the 7 percent mark seem to be a decision point that leads to buyers dropping out of the market, or at least waiting for a dip in rates.

Pending home sales in April, which in March rose 3.4 percent to the best level in a year, are expected to rise 0.3 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.