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Housing report could serve as key economic tell

Some strategists and portfolio managers are looking to pending home sales, set for release on Monday, as an indicator of the broader economy's health.

The National Association of Realtors is scheduled to release June pending home sales on Monday shortly after the market opens. This is a helpful forward indicator, said Eddy Elfenbein, portfolio manager at Advisorshares, as it shows the number of people who have agreed to buy new homes.

The prior report, for May, showed that the index fell 0.8 percent month over month, and 1.7 percent year over year, a weak reading which suggested inventory has fallen.

"When people buy a new home, that's usually one of the biggest purchases they'll make in their entire lifetime," Elfenbein, who also edits the Crossing Wall Street blog, said Friday on CNBC's "Trading Nation."

"So it's a good read of how healthy the economy is and how it will perform in the future. It's one of those reports that you don't have to watch every single month, but I've been looking at it particularly closely recently because the numbers have been pretty weak."

The data for pending home sales in May was weak, but not because the demand was weak, he said. The issue was supply, Elfenbein said, adding, "There just aren't enough new homes for people to buy. That's what I think is very important."

He said he doesn't have a specific expectation and called the upcoming report "a bit of a question mark."

Economists, per FactSet data, are expecting a month-over-month increase of 1 percent; the prior three monthly reports all showed month-over-month declines.

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