Gold prices see little movement following 10.6% decline in U.S. pending home sales

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(Kitco News) - The gold market is clawing its way higher even as price remain below $1,700 an ounce as fewer American’s start the process to buy a home, according to the latest report from the National Association of Realtors (NAR).

Wednesday, the NAR said that its pending home sales index dropped 10.6% in February to a reading of 110.3, down from January’s 2.8% decline. The latest housing data significantly missed expectations; according to consensus forecasts, economists were expecting to see a 3.1% decline.

For the year pending home sales are down 0.5%, the report said.

The gold market is not seeing much reaction to the latest housing market data as prices trade down from session highs. June gold futures last traded at $1,695.70 an ounce, up 0.58% on the day.

Economists pay close attention to the pending home sales numbers because the index is seen as a forward-looking barometer for the housing market. A lag of a month or two usually exists between a contract and a completed sale.

Lawrence Yun, NAR’s chief economist, said in the report that low housing inventories is impacting contract signing. He added that demand for homes remains strong even as mortgage rates rise, pushed higher by the sharp rally in10-year bond yield, which rose to its highest level in 14 months.

Although mortgage rates are rising, Yun Yun, said that they are still expected to remain relatively low at no more than 3.5% in 2021. He added that rates are still advantageous to both prospective buyers and to current homeowners who are contemplating refinancing

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