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(Kitco News) - The U.S. housing sector could be finding a bottom as consumers start to wade back into the market, according to the latest housing sales numbers from the National Association of Realtors (NAR).
Thursday, the NAR said that existing home sales increased 0.2% last month, with the annualized sales rate rising to 4.30 million homes, compared to April's sales rate of 4.29 million. The data was better than expected, as economists were looking for the sales rate to drop to 4.25 million.
The latest housing data is not having much impact on gold as the precious metal continues to see solid selling pressure following hawkish comments from Federal Reserve Jerome Powell in his first day of testimony before Congress.
"Mortgage rates heavily influence the direction of home sales," said NAR Chief Economist Lawrence Yun. "Relatively steady rates have led to several consecutive months of consistent home sales."
Although mortgage rates have stabilized in recent weeks as the Federal Reserve halted its interest rate hikes; however, the central bank has maintained its hawkish bias. During his testimony before the U.S. House Committee on Financial Services Wednesday, Powell said it could take a while to bring inflation down to the central bank's 2% target. He noted that the central bank expects to raise interest rates higher this year.
Aside from interest rates, Yun noted that an improvement in the supply of homes for sale is also attracting buyers.
"Newly constructed homes are selling at a pace reminiscent of pre-pandemic times because of abundant inventory in that sector. However, existing-home sales activity is down sizably due to the current supply being roughly half the level of 2019," he said.
According to the report, the total housing inventory as of the end of May was 1.08 million units, up 3.8% from April but down 6.1%, representing a 3-month supply at the current sales pace.
Looking at home prices, the NAR said the median existing-home price for all housing types in May was $396,100, a decline of 3.1% from May 2022.
