The NAR's pending home sales index for November is up 2.2 percent to 79.0 after a trivial revision lower to 77.3 in October. The index is above the consensus of up 0.9 percent in the Econoday survey of forecasters. The index is 6.9 percent above 73.9 in November 2023. The index is up in three of four regions with the Northeast down 1.3 percent and increases of 0.4 percent in the Midwest, 5.2 percent in the South, and 0.5 percent in the West.

The index is for contracts signed in November but not yet closed. NAR Chief Economist Lawrence Yun said,"Consumers appeared to have recalibrated expectations regarding mortgage rates and are taking advantage of more available inventory."

The Freddie Mac weekly rate for a 30-year fixed rate mortgage rose steadily in October and into November. The rate was 6.12 percent in the October 3 week and was up to 6.72 percent by the October 31 week. Rates were as high as 6.84 percent in the November 21 week. Some moderation in rates followed but these are back up to 6.85 percent as of the December 26 week. Homebuyers who had locked in a lower rate in October were probably anxious to get a contract signed before the rate expired. The dip in rates in late November and early December could mean some support for home buying in December.

The recovery in pending home sales in September and October is expected to continue with forecasters looking for sales up 0.9 percent in November. Even though mortgage rates rose in November, a less pricey housing market was expected to lure more buyers in November.

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.