The NAR data on sales of existing homes are down 5.4 percent in June to 3.890 million units at a seasonally adjusted annual rate after an unrevised 4.11 million units in May. The level is also down 5.4 percent compared to a year ago. The June reading is a little below the consensus of 4.00 million units in the Econoday survey of forecasters. The June decline reflects a 5.1 percent decrease in sales of single-family homes to 3.520 million units and 7.5 percent decline in sales of condos and co-ops to 370,000 units. The drop in the pace of sales is likely due to relatively high mortgage rates and an ongoing escalation in prices.

Sales in June are from contracts signed a month or two earlier when mortgage rates were at a near-term peak. The average rate for a Freddie Mac 30-year fixed rate mortgage was over 7 percent in April and May, but started to decline in the second half of June. Rates are now below 7 percent and expected to stay there for the immediate future. This could boost sales in the coming months as the market for existing homes is showing increased supply that should ease the upward trend for prices.

The months' supply of homes on the market is up to 4.1 in June from 3.7 in May and is the highest in over 4 years. With more selection, potential homebuyers will not be competing as aggressively for units that are just coming on to the market and may be willing to wait in the expectation that more choices will become available. The median prices of an existing home is up 2.3 percent in June to $426,900 from $417,200 in May, and up 4.1 percent from $410,100 in the year ago month.

NAR Chief Economist Lawrence Yun said,"We're seeing a slow shift from a seller's market to a buyer's market." He continued,"Homes are sitting on the market a bit longer, and sellers are receiving fewer offers. More buyers are insisting on home inspections and appraisals, and inventory is definitively rising on a national basis." He also noted,"Even as the median home price reached a new record high, further large accelerations are unlikely. Supply and demand dynamics are nearing a balanced market condition. The months supply of inventory reached its highest level in more than four years."

After May's 4.11 and April's 4.14 million annualized rates, existing home sales in June are expected to ease slightly to a 4.00 million rate.

Existing home sales tally the number of previously constructed homes, condominiums and co-ops in which a sale closed during the month. Existing homes (also known as home resales) account for a larger share of the market than new homes and indicate housing market trends.

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 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.