Gold Remains Weak After March Sales Of U.S. Existing Homes Rise 1.1%
Editor's Note: Updating earlier story with more details from report.
(Kitco News) - Gold prices extended their losses slightly Monday after a report showing that March sales of previously owned U.S. homes rose by 1.1% to a seasonally adjusted and annualized pace of 5.6 million.
Consensus expectations compiled by various news organizations called for sales to be around 5.51 million to 5.52 million. February sales were 5.54 million.
Gold was already sharply lower going into the report in response to a stronger U.S. dollar and 10-year U.S. Treasury yields nearing 3%, analysts said. They also cited reduced risk aversion in other markets.
As of 10:12 a.m. EDT, Comex June gold was trading down by $14 for the day to $1,324.30 an ounce. Two minutes ahead of the report, the metal was at $1,326.
Existing-home sales grew for the second consecutive month in March, but lagging inventory levels and prides kept sales 1.2% below year-ago levels, said the report, released by the National Association of Realtors.
Lawrence Yun, NAR chief economist, said home closings in March eked forward despite challenging market conditions in most of the country.
"Robust gains last month in the Northeast and Midwest – a reversal from the weather-impacted declines seen in February – helped overall sales activity rise to its strongest pace since last November at 5.72 million," Yun said. "The unwelcoming news is that while the healthy economy is generating sustained interest in buying a home this spring, sales are lagging year-ago levels because supply is woefully low and home prices keep climbing above what some would-be buyers can afford."
The median existing-home price for all housing types in March was $250,400, up 5.8% from March 2017, when it was $236,600, the report said. The March price increase marks 73 straight months of year-over-year gains.
"Although the strong job market and recent tax cuts are boosting the incomes of many households, speedy price growth is squeezing overall affordability in several markets – especially those out West," said Yun.
Total housing inventory at the end of March climbed 5.7 percent to 1.67 million existing homes available for sale, although this is still 7.2% lower than a year ago when it was 1.80 million. This has fallen year-over-year for 34 consecutive months, the report said. Unsold inventory is at a 3.6-month supply at the current sales pace, compared to 3.8 months a year ago.
Single-family home sales rose edged up 0.6 percent to an annual rate of 4.99 million in March from 4.96 million in February, but are 1% below the 5.04 million sales pace a year ago. The median existing single-family home price was $252,100 in March, up 5.9% from March 2017.
Existing condominium and co-op sales increased 5.2% to a seasonally adjusted annual rate of 610,000 units in March, but are still 3.2% below a year ago, the report said. The median existing condo price was $236,100 in March, 4.8% above a year ago.