(Kitco News) - The gold market continues to struggle to attract new bullish attention and could see renewed selling pressure as the U.S. housing market appears to be stabilizing.
Total existing-home sales, including single-family homes, townhomes, condominiums, and co-ops, rose 3.2% to a seasonally adjusted annual rate of 4.17 million in May, compared to a sales rate of 4.02 million in April, the National Association of Realtors (NAR) announced Tuesday.
According to consensus estimates, economists were forecasting a smaller increase to 4.07 million. The report noted that home sales were also up 3.2% year over year.
“More Americans are on the move, with home sales rising to the highest level since December. This is great news for the housing market and the economy,” said NAR Chief Economist Dr. Lawrence Yun. “Improving affordability is helping drive this momentum. Even with mortgage rates ticking up compared to earlier in the year, they remain lower than a year ago and are essentially at the long-term historical average. Income gains are also outpacing home price growth by a small margin in most parts of the country.”
The gold market was seeing a modest bid ahead of the report, but that has now been replaced by some selling in the initial reaction to the data. Spot gold last traded at $4,326.50 an ounce, roughly unchanged on the day.
After a couple of difficult years, Yun said the U.S. housing market appears to be on solid footing.
“Only 1% of all home sales involved a foreclosure or an underwater situation in which the sale price could not cover the outstanding mortgage balance. This shows that homeowners are on solid financial footing,” he said.
The U.S. housing market has struggled in recent years as elevated interest rates have kept mortgage rates high. At the same time, a limited supply of homes has pushed prices higher.
As of the end of May, the market had a supply of 1.55 million homes for sale, up 3.3% from April. The inventory represents a 4.5-month supply.
Meanwhile, housing prices hit another record high in May. The report said that the median price for all existing housing types was $429,300, an increase of 1.3% from a year ago.
