Gold price remains in negative territory despite third monthly drop in U.S. existing home sales
(Kitco News) - Gold prices is not able to push back into positive territory even after the last report from the National Association of Realtors (NAR) showed American’s bought homes at a slower pace than expected in April.
Friday, the NAR said that existing home sales in April fell 2.7% to seasonally-adjusted annual rate of 5.85 million homes. The data missed expectations; according to consensus forecasts, economists were expecting to see a sales rate of 6.09 million.
For most of last year, the U.S. housing sector was a pillar of strength for the U.S. economy devastated by the COVID-19 pandemic. However, it appears that momentum in the housing sector is starting to weaken. This is the third consecutive month that existing home sales have missed expectations.
For the year, the report said that home sales are up 20% compared to April 2019.
Despite the disappointing housing sales data, the gold market is not able to find any traction as the price remains in negative territory. June gold futures last traded at $1,876.20 an ounce, down 0.30% on the day.
“Home sales were down again in April from the prior month, as housing supply continues to fall short of demand," said Lawrence Yun, NAR's chief economist, said in a statement. "We'll see more inventory come to the market later this year as further COVID-19 vaccinations are administered and potential home sellers become more comfortable listing and showing their homes. The falling number of homeowners in mortgage forbearance will also bring about more inventory.”
As inventories fall, the U.S. housing sector is seeing a significant rise in home prices. The NRA said that the median price for existing homes last month was $341,600, up 19% from last year.
“This is a record high and marks 110 straight months of year-over-year gains,” the report said.
Looking at inventories, the NRA said that the supply of homes sale rose slightly last month totaling 1.16 million and representing a 2.4-month supply at the current sales pace.
“These numbers continue to represent near-record lows,” the report said.