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(Kitco News) – The gold market is seeing a gain above $2,000 as the market sees further support from disappointing home sales data.
Existing home sales declined 4.1% to a seasonally adjusted and annualized rate 3.79 million units last month, compared to September’s annualized rate of 3.95 million homes, the National Association of Realtors (NAR) said on Thursday.
The latest housing data significantly missed expectations. Market consensus projections were calling for existing home sales to fall slightly to 3.90 million units.
The gold market was seeing solid momentum, breaking above $2,000 an ounce ahead of the disappointing economic data and is seeing further bullish flows in initial reaction. December gold futures last traded at $2,007 an ounce, up 1.35% on the day.
For the year, the report said that home sales are down more than 14%.
While October’s sales numbers continue to disappoint, weakness in the housing market is not a major surprise for many economists and market analysts. Home sales have been lackluster through 2023, dragged down by the Federal Reserve’s aggressive monetary policy and higher prices.
“Prospective home buyers experienced another difficult month due to the persistent lack of housing inventory and the highest mortgage rates in a generation,” said NAR Chief Economist Lawrence Yun. “Multiple offers, however, are still occurring, especially on starter and mid-priced homes, even as price concessions are happening in the upper end of the market.”
Along with higher mortgage rates, the NRA noted that low housing inventories are keeping prices elevated, keeping many potential new home buyers out of the market.
The report said that the supply of homes for sale rose to 1.15 million units, up 1.8% from September but down 5.7% from last year. The supply of unsold homes represents a 3.6-month supply at the current sales pace.
Looking at home prices, the report said the median existing-home price for all housing types in October was $391,800, an increase of 3.4% from October 2022.
“While circumstances for buyers remain tight, home sellers have done well as prices continue to rise year-over-year, including a new all-time high for the month of October,” Yun said. “In fact, a typical homeowner has accumulated more than $100,000 in housing wealth over the past three years.”
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