News Bites
Gold prices slips into neutral as U.S. existing home sales drop 5.9% in July falling to a nearly two-year low
(Kitco News) - Gold prices are trading in roughly neutral territory and are not attracting any new bullish momentum even as the U.S. housing market continues to cool.
Existing home sales fell 5.9% last month to a seasonally adjusted and annualized rate of 4.81 million units, compared to June's annualized rate of 5.12 million homes, the National Association of Realtors (NAR) said on Thursday. Market consensus called for existing home sales to decline to 4.87 million.
This is the sixth straight decline in existing home sales and the pace of sales is at its lowest point in nearly two years when the COVID-19 pandemic significantly disrupted the market.
For the year, existing home sales are down more than 20%
The gold market continues to pay little attention to economic data as it tries to hold on to gains. December gold futures last traded at $1,777.40 an ounce, roughly unchanged on the day.
According to the NAR, the housing market continues to cool as rising prices and mortgage rates price new home buyers out of the market. However, NAR Chief Economist Lawrence Yun said the market could be finding a bottom.
"The ongoing sales decline reflects the impact of the mortgage rate peak of 6% in early June," said Yun. "Home sales may soon stabilize since mortgage rates have fallen to near 5%, thereby giving an additional boost of purchasing power to home buyers."
Yun described the housing market as being in a recession; however, weaker demand has had a limited impact on prices.
"Inventory remains tight and prices continue to rise nationally with nearly 40% of homes still commanding the full list price," he said.
The report said that the median price for existing homes rose to $403,800 last month, up nearly 11% from last year.
"This marks 125 consecutive months of year-over-year increases, the longest-running streak on record," the report said.
Looking at the housing inventory, the report said that the supply totaled 1.31 million units, up 4.8% from last month, representing a 3.3-month supply.
