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Gold prices struggling to find momentum even after disappointing U.S. exiting home sales data

(Kitco News) – Gold prices are holding in positive territory but still trending below $1,500 an ounce as fewer U.S. consumers bought existing homes last month, according to the latest report from the National Association of Realtors (NAR).

Existing home sales dropped 2.2% in September to a seasonally adjusted and annualized rate of 5.38 million units, compared to August’s annualized rate of 5.49 million homes, the association said on Tuesday. Economists were expecting to see a sales rate of 5.45 million homes.

Despite the month-over-month decline, the NAR said that sales are up 3.9% compared to September 2018.

Gold prices were largely unchanged after the data was released, with December gold futures last seen trading at $1,488.60, relatively unchanged on the day.

Lawrence Yun, NAR’s chief economist, said that despite historically low mortgage rates, sales have not commensurately increased, in part due to a low level of new housing options. 

“We must continue to beat the drum for more inventory,” said Yun in the report. “Home prices are rising too rapidly because of the housing shortage, and this lack of inventory is preventing home sales growth potential.”

Looking at prices, the NAR said that the media price for existing homes last month was $272,100, up 5.9% from September 2018. This is the 91 consecutive month the housing sector has seen year-over-year gains in home prices.

The NAR said that the inventory of homes for sale in September was 1.83 million, relatively unchanged from August but down 2.7% from last year. At the current sales pace the current inventory represents a 4.1 month supply.