U.S. pending home sales surprise on the upside in December, gold price steady
(Kitco News) Gold prices remained largely unchanged as the U.S. pending home sales beat expectations in December, rising for the first time since May.
The U.S. pending home sales were up 2.5% in December following a drop of 2.6% in November, the National Association of Realtors (NAR) said on Friday. The consensus forecast called for a decline of 0.9%.
The pending home sales index was at 76.9 last month after registering 75 in November. On an annual basis, pending home sales were down 33.8% from December 2022.
Rising interest rates have weighed on the U.S. home-buying demand last year, but that is now changing, said NAR's chief economist Lawrence Yun.
"This recent low point in home sales activity is likely over. Mortgage rates are the dominant factor driving home sales, and recent declines in rates are clearly helping to stabilize the market," said Yun. “The new normal for mortgage rates will likely be in the 5.5% to 6.5% range. The South, in particular, is set to outperform the rest of the country, thanks primarily to better job market conditions."
Economists pay close attention to the pending home sales numbers because the index is seen as a forward-looking barometer for the housing market. A lag of a month or two usually exists between a contract and a completed sale.
Following the data release, gold edged up slightly after also digesting the Federal Reserve’s preferred inflation measure – the core PCE index – that was published earlier this morning. February Comex gold futures were last at $1,925.30, down 0.24% on the day.