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(Kitco News) -The gold market, while off its recent highs, continues to hold support well above $1,950 an ounce as the U.S. housing market continues to struggle as fewer consumers than expected are buying new homes.
New home sales dropped 2.5% last month and were at a seasonally adjusted annualized rate of 697,000 homes, the U.S. Commerce Department said on Wednesday. May sales were revised down to a rate of 715,000 units. Market consensus calls expected sales to decline to 726,000 units in June.
However, for the year, new home sales are up 23.8% compared to June 2022, which was when the Federal Reserve started its aggressive tightening cycle.
The gold market is not seeing much reaction to the disappointing housing data as it holds in positive territory. August gold futures last traded at $19,68.70 an ounce, up 0.25% on the day.
Looking at home prices, the report said that the median sales price of new houses sold in June 2023 was $415,400. At the same time, the average sales price was $494,700.
The report said that as of the end of June, there was an inventory of 432,000 new homes for sale, representing a 7.4-month supply at the current sales rate.
Economists continue to pay close attention to the U.S. housing market as it is a major contributor to economic activity. The housing sector has struggled as the Federal Reserve has aggressively raised interest rates at the fastest pace in 40 years.
Along with rising mortgage rates, a lack of supply has kept housing prices elevated, pricing many potential new home buyers out of the market.
