The NAR's pending home sales index is up to 77.4 in October after a negligible upward revision to 75.9 in September. The October increase is well above the consensus of down 1.8 percent in the Econoday survey of forecasters. The index is the highest since 78.3 in March. The regional indexes are higher across the board. The index is up 4.7 percent in the Northeast, 4.0 percent in the Midwest, 0.9 percent in the South, and 0.2 percent in the West.

Those homebuyers who qualified for a mortgage in late September and early October were probably eager to take advantage of wider inventory and some moderation in prices. At that time the Freddie Mac rate for a 30-year fixed rate mortgage fell as low as 6.08 percent in the September 26 week and started to rise again thereafter. Borrowers who could lock in the near-term low in rates would not want to lose the opportunity for increased affordability.

However, rising rates are not necessarily choking off homebuying. Buyers will be looking for bargains in a market that has cooled significantly. And although rates have risen as high as 6.84 percent as of the November 21 week, the rate still compares favorably with the near-term high of 7.79 percent in the October 26, 2023.

Forecasters expect pending home sales down 1.8 percent on the month in October after a big 7.4 percent rise in September. Mortgage rates were down in September and back up in October.

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.