Gold Prices Unchanged As U.S. Existing Home Sales Hit Lowest Level In A Year
(Kitco News) - Gold prices were relatively unchanged after U.S. consumers bought fewer pre-existing homes in August, according to the latest report from the National Association of Realtors (NAR).
Existing home sales shocked with a drop of 1.7% last month to a seasonally adjusted and annualized rate of 5.35 million units, compared to July’s annualized rate of 5.44 million homes, the association said on Wednesday.
This marked the lowest level in twelve months. Economists were expecting to see a 0.3% advance to 5.46 million units.
Gold prices were relatively unchanged immediately after the figures were released, with December Comex gold last seen at $1,315.00, up 0.34% on the day. Earlier in the session, gold was trading higher amid bargain hunting and short covering, as traders positioned themselves ahead of the Federal Reserve announcement scheduled for the afternoon.
Existing-home sales fell for the fourth time in five months, with strained supply levels continuing to put pressure on buying, NAR said in the report.
Lawrence Yun, NAR chief economist, pointed out that demand for home buying remained solid.
"Steady employment gains, slowly rising incomes and lower mortgage rates generated sustained buyer interest all summer long, but unfortunately, not more home sales," Yun said. "What's ailing the housing market and continues to weigh on overall sales is the inadequate levels of available inventory and the upward pressure it's putting on prices in several parts of the country. Sales have been unable to break out because there are simply not enough homes for sale."
The median price for all existing-home types in August was $253,500, up 5.6% from last year, which marked the 66th straight month of year-over-year gains. At the same time, the association said that total inventory as of the end of August declined 2.1% to 1.88 million existing homes available for sale.
"Market conditions continue to be stressful and challenging for both prospective first-time buyers and homeowners looking to trade up," added Yun.
Many economists warn that rising home prices could potentially pose a serious challenge to future sales.
"In the long run, rising home prices and lean inventories may negatively affect headline existing sales. However, demand and consumer fundamentals over the near term remain strong, in our view," economists at Nomura Global Markets Research wrote in a note prior to the release.