(Kitco News) - Gold prices are holding renewed support above $4,100 an ounce and could attract fresh momentum as the U.S. housing market remains lackluster, with home sales continuing to struggle.
Total existing-home sales, including single-family homes, townhomes, condominiums, and co-ops, fell 2.4% to a seasonally adjusted annual rate of 4.09 million in June, down from 4.19 million in May, the National Association of Realtors (NAR) announced Thursday.
According to consensus estimates, economists had expected an unchanged reading. The report also noted that home sales were up 2.8% compared with the same period last year.
Although the gold market is not seeing a significant rally in its initial reaction to the disappointing home sales data, prices have climbed to session highs. Spot gold last traded at $4,134.10 an ounce, up nearly 1.5% on the day.
The U.S. housing market continues to struggle as the Federal Reserve’s new tightening bias has pushed mortgage rates higher.
“The back-and-forth in monthly home sales activity, driven by mild fluctuations in mortgage rates, shows how sensitive home buyers are to affordability conditions,” said NAR Chief Economist Lawrence Yun. “However, job gains—more than half a million since the beginning of the year—will continue to provide support for the housing market.”
Along with volatile mortgage rates, a lack of supply continues to support higher home prices. The report said the median home price hit a record high of $440,600 last month, up 1.8% from a year earlier.
However, Yun said this trend should not be a significant obstacle for consumers.
“Affordability is better than a year ago because wage growth is outpacing home price growth,” Yun said. “However, progress on long-term housing affordability could be hampered if inventory growth continues to stall. Without consistent gains in inventory, home prices can accelerate. It is critical to introduce more supply to the market to widen the opportunity for homeownership.”
Looking at national inventories, the report said there were 1.56 million units for sale last month, representing a 4.6-month supply.
