(Kitco News) - The U.S. housing market is showing signs of stabilization, as the number of new homes sold last month fell less than expected. However, the better-than-expected data is having little impact on gold, which continues to trade within striking distance of $2,700 an ounce.
New home sales dropped 4.7% last month to a seasonally adjusted annual rate of 716,000 homes, below July’s upwardly revised rate of 751,000, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, announced on Wednesday.
New home sales are up 9.8% from August 2023, the report stated.
Although sales declined, the report was better than expected, as economists had anticipated a sharper drop to 699,000.
The gold market is largely ignoring the latest economic data, as prices continue to hold near record highs. December gold futures last traded at $2,689.80 an ounce, up 0.48% on the day.
The U.S. housing market has struggled throughout 2024 due to the Federal Reserve’s aggressive monetary policy; however, economists expect the market to turn around as the central bank has initiated a new easing cycle with a 50-basis-point rate cut.
The Federal Reserve has also signaled that the Fed Funds rate could drop to 3% by 2026.
While mortgage rates are expected to fall, the housing sector still faces elevated home prices.
The report stated that the median sales price of new houses sold in August was $420,600, while the average sales price was $492,700.
Economists have noted that the supply of new homes must increase for prices to decline. The report estimated that the number of homes available for sale was 467,000, representing a 7.8-month supply.
