The NAR's pending home sales index for April is down 6.3 percent to 71.3 after a downward revision to 76.1 in March. The April decline is well below the consensus of down 1.1 percent in the Econoday survey of forecasters. The regional indexes for pending home sales are lower across the board. The indexes are down 0.6 percent in the Northeast, down 5.0 percent in the Midwest, down 7.7 percent in the South, and off 8.9 percent in the West.

Pending sales in April are generally for mortgages locked in In March and early April. The weekly average rate for a Freddie Mac 30-year fixed rate mortgage was as low as 6.63 percent in the March 6 week, rose a few basis points in the next few weeks, and bottoms at 6.62 percent in the April 10 week. The following week the rate jumped to 6.83 percent.

Despite relatively favorable mortgage rates for borrowers, potential homebuyers are on the sidelines due to high levels of uncertainty about the economic outlook and job security.

Pending home sales are for contracts signed for existing homes, but not yet closed. While pending home sales are a good indicator of future sales, not all contracts make it to closing.

The consensus looks for home sales retreating by 1.1 percent after the 6.1 percent jump in March.

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.