Editor’s Note: With so much market volatility, keep up with the daily news! In just a few minutes, get caught up in our quick recap of today’s top news and expert insights. Sign up here!
(Kitco News) – The gold market continues to show solid technical buying momentum with economic data having little impact on price action, even as fewer US consumers start the mortgage process to buy a home.
The National Association of Realtors (NAR) said Wednesday its Pending Home Sales Index, based on signed contracts, fell 2.0% over the past month to 88.4. The decline was steeper than expected as economists had expected a 0.9% drop.
Pending home sales have declined in nine of the last 10 months. For the year, the NAR said the index was down more than 24%.
The gold market saw some technical buying momentum ahead of the report, holding relatively close to session highs in the initial reaction. December gold futures were last traded at $1.660 an ounce, up 1.47% on the day.
The report found broad-based weakness in the housing sector, with pending home sales falling in three of the four major regions nationwide.
NAR Chief Economist Lawrence Yun said rising mortgage rates continue to weigh on the housing sector due to the Federal Reserve’s aggressive tightening cycle.
“The direction of mortgage rates — up or down — is the primary driver of home buying, and decades of interest rates have severely impacted contract signings,” said NAR chief economist Lawrence Yun. “If mortgage rates stay moderate and the economy continues to create jobs, home buying should stabilize as well.”
Economists are keeping a close eye on upcoming home sales figures as the index is considered a forward-looking barometer for the real estate market. There is usually a one or two month delay between a contract and a completed sale.
The NAR expects existing home sales to fall 15.2% this year. Yun added that the housing market will not stabilize until inflation eases.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of the author Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. It is not an invitation to exchange goods, securities or other financial instruments. Kitco Metals Inc. and the author of this article assume no responsibility for any loss and/or damage resulting from the use of this publication.