(Kitco News) - The U.S. housing market continues to struggle as elevated mortgage rates and higher prices prevent consumers from even starting the home-buying process, according to the latest data from the National Association of Realtors (NAR).
The U.S. Pending Home Sales Index dropped 0.8% in June, the NAR announced on Thursday. The data missed consensus forecasts, as economists had expected to see a 0.2% increase.
For the year, the report said that pending home sales are down 2.8%.
"The data shows a continuation of small declines in contract signings despite inventory in the market increasing. Pending sales in the Northeast increased incrementally even though home price growth in the region has been the strongest in the country," said NAR Chief Economist Lawrence Yun.
Yun added that there is growing optimism in the housing sector that the market has bottomed out.
“REALTORS® are optimistic that homebuying and selling activity will increase. That confidence is supported by the fact that mortgage applications have been rising,” he said.
The gold market has not seen much reaction to the disappointing housing data, as better-than-expected labor market numbers and solid economic growth in the second quarter have weighed on the precious metal.
Gold has managed to hold critical support around $3,300 an ounce. Spot gold last traded at $3,305.60 an ounce, down 0.58% on the day.
Economists closely watch pending home sales because the report is a leading indicator of existing home sales, given that contracts are signed a few months before the homes are actually sold.
The U.S. housing market has been trying to stabilize after experiencing significant weakness over the past two years. Many potential buyers have been priced out due to rising home prices and higher mortgage rates.
