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(Kitco News) - Any signs that the U.S. housing market has bottomed out may be a little premature as the number of consumers starting the process of buying a new home has declined for the third consecutive month.
At the same time, the disappointing housing market data is not having much impact on the gold market as prices continue to hover above critical support at $1,900 an ounce.
The U.S. pending home sales index dropped to a reading of 76.5 in May, down 2.7%, following April's revised decline of 0.4%., the National Association of Realtors (NAR) said on Thursday. The latest housing sales data missed expectations as consensus forecasts were calling for a drop of 0.5%
On an annual basis, pending home sales were down 22.2% from May 2022.
The gold market remains under solid selling pressure, largely ignoring the latest economic data. August gold futures last traded at $1,908.90 an ounce, down 0.70% on the day.
NAR chief economist Lawrence Yun said that despite the drop in contract signings, the housing market remains resilient.
"Despite sluggish pending contract signings, the housing market is resilient with approximately three offers for each listing," he said in the report, "The lack of housing inventory continues to prevent housing demand from being fully realized. It is encouraging that homebuilders have ramped up production, but the supply from new construction takes time and remains insufficient."
The housing market has struggled through most of 2023 as the Federal Reserve has maintained its most aggressive monetary policies in the last 40 years, driving mortgage rates higher.
At the same time, low inventories in the housing market have kept prices elevated, keeping many potential new-time home buyers out.
