(Kitco News) - The U.S. housing market could start to weigh on economic growth as fewer consumers bought new homes last month.
New home sales fell to a seasonally adjusted annualized rate of 590,000 homes in June down 8.1%, the U.S. Commerce Department said on Tuesday. May's sales were revised down to rate of 642,000 units.
The sales data was significantly weaker than expected as economists were looking for a pace of around 663,000 units.
The gold market is not seeing much reaction to the latest home sales data as it remains in negative territory. August gold futures last traded at $1,716.90 an ounce, down 0.13% on the day.
Economists note that the housing sector, a major contributor to U.S. GDP is struggling in the face of two significant headwinds. Rising home prices are pushing many new home buyers out of the market. At the same time the Federal Reserve's aggressive monetary policy stance is driving mortgage rates higher.
“Overall, this is consistent an expected drag on growth from residential investment in the upcoming GDP report,” said Katherine Judge, senior economist at CIBC.
Looking at home price, the report said that the median sales price of new houses sold in June 2022 was $402,400. At the same time, the average sales price was $456,800.
Looking at the supply of new homes for sale, the report said that the inventory of new homes was for 457,000, representing a 9.3-month supply at the current sales rate.
