The NAR's pending home sales index is up 6.1 percent to 76.5 in March after a negligible upward revision to 72.1 in February. The rise is well above the consensus of up 1.0 percent in the Econoday survey of forecasters. The index strength reflects gains in three of four regions. In April, the Northeast is down 0.5 percent, but there are solid rises of 4.9 percent in the Midwest, 9.8 percent in the South, and 4.8 percent in the West. Contract signings in March may represent a little pent-up demand as interest rate sensitive homebuyers deciding to act while rates were a bit lower.

The Freddie Mac weekly rate for a 30-year fixed rate mortgage reached a near term peak of 7.04 percent in the January 16 week. It has fallen steadily since then to a low of 6.76 percent in February and 6.65 percent in the weeks of March 13 and 27. There are further declines to a low of 6.62 percent in the April 10 week that saw a sharp reversal to 6.83 percent in the April 17 week and little moderation to 6.81 percent in the April 24 week.

Pending home sales are those for contracts signed in the month which will close in the coming month or two. March -- and probably into early April -- sees homebuyers taking advantage of more inventory and less upward price pressure for available units at a time when mortgage rates improved affordability. However, with worries about the economy slowing and job security declining, future home sales of existing units could decline as quickly as they rose.

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.