(Kitco News) - The U.S. housing market shows further signs of stabilization as potential home buyers creep back into the market, according to the latest report from the National Association of Realtors (NAR).
Thursday, the NAR said its pending home sales index rose 1.6% in February, following a 1.6% increase in January. The Index now sits at 75.6.
However, compared to last year, the number of contracts signed is down 7%, the report said.
"While modest sales growth might not stir excitement, it shows slow and steady progress from the lows of late last year," said NAR Chief Economist Lawrence Yun. "Ongoing job gains are clearly increasing demand along with more inventory."
The latest economic data is not having much of an impact on the gold market as it continues to benefit from renewed bullish momentum. June gold last traded at $2,227.80 an ounce, up 0.69% on the day.
Economists pay close attention to pending home sales because the report is a leading indicator of existing home sales, given that contracts are signed a few months before homes are actually sold.
The housing market has struggled for more than a year as rising costs and higher mortgage rates have priced many new home buyers out of the market. However, some economists have said that home sales could improve as the Federal Reserve still looks to cut rates this year, bringing mortgage rates down.
At the same time, Yun said that the supply of homes is improving, which would help lower prices.
"There will be a steady rise in inventory from recent growth in home building. Additionally, many sellers, who delayed listing in the past two years, will begin to put their homes on the market to move to a different home that better fits their new life circumstances – such as changes in family composition, jobs, commuting patterns and retirees wanting to be closer to their grandkids," he said.
