(Kitco News) -
The gold market continues to hold support above $2,600 an ounce as the U.S. housing sector continues to struggle to find consistent momentum as the sales pace of existing homes continues to fall, according to the latest data from the National Association of Realtors (NAR).
Home sales dropped2.5% last month to a seasonally adjusted annual rate of 3.86 million units, down from Juy’s rate of3.96 million, the National Association of Realtors said on Thursday. The data missed expectations as economists forecasted looked for a rate of 3.92 million.
Home resales, which account for a large portion of U.S. housing sales, fell 4.2% from August 2023.
The gold market is not seeing much reaction to the disappointing housing sales numbers. December gold futures last traded at $2,600.60 an ounce, roughly flat on the day.
Although the housing market continues to struggle, NAR Chief Economist Lawrence Yun said that that momentum could quickly shift.
Economists are expecting mortgage rates to continue to slide after the Federal Reserve cut interest rates by 50 basis points and signaled lower rates through 2026.
"Home sales were disappointing again in August, but the recent development of lower mortgage rates coupled with increasing inventory is a powerful combination that will provide the environment for sales to move higher in future months," said Yun, in the report.
The U.S. housing sector has struggled in recent years as the Federal Reserve’s aggressive monetary policy has pushed mortgage rates higher and low inventories have pushed prices higher.
However, trends are starting to shift. The NAR noted that inventories are starting to grow. Total housing inventory registered at the end of August was 1.35 million units, up 0.7% from July and 22.7% from one year ago, representing a 4.2-month supply, the report said.
“The rise in inventory – and, more technically, the accompanying months’ supply – implies home buyers are in a much-improved position to find the right home and at more favorable prices,” Yun added.
At the same time, the median price for all existing housing types in August was $416,700, up 3.1% from one year ago.
