(Kitco News) - The U.S. housing market continues to see significantly slowing momentum as the number of consumers who are starting the process of buying a home fell dramatically in April, according to the latest report from the National Association of Realtors (NAR).
Thursday, the association said that its Pending Home Sales Index fell to 99.3 in April, down 3.9% from March. Economists were expecting to see a 1.9% decline.
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.
The report noted that this is the sixth consecutive month of declining activity in the U.S. housing market. Economists note that consumers are being hit with rising home prices and mortgage rates, pricing many first-time homebuyers out of the market.
"The escalating mortgage rates have bumped up the cost of purchasing a home by more than 25% from a year ago, while steeper home prices are adding another 15% to that figure," said Lawrence Yun, NAR's chief economist.
The gold market is starting to see some new bullish momentum as the latest housing market data is the latest in disappointing news Thursday morning. Ahead of this report, data showed that the U.S. economy contracted 1.5% in the first quarter, slowing more than expected.
Market analysts continue to watch $1,850 an ounce very closely. June gold futures last traded at $1,848.50 an ounce, up 0.12% on the day.
For the year, pending home sales are down 9.1%. Yun said that in the current environment, he expects existing home sales to fall 9% this year.
"Pending contracts are telling, as they better reflect the timelier impact from higher mortgage rates than do closings," said Lawrence Yun, NAR's chief economist. "The latest contract signings mark six consecutive months of declines and are at the slowest pace in nearly a decade."
