Gold struggling even as U.S. existing home sales fall 5.9% in March
NEW YORK (April 24) The gold market continues to hold support above $3,300 an ounce and is not seeing any renewed safe-haven demand even as the U.S. housing market continues to struggle.
Total existing-home sales, including single-family homes, townhomes, condominiums, and co-ops, dropped 5.9% to a seasonally adjusted annual rate of 4.02 million in March, down from February's reading of 4.27 million, the National Association of Realtors (NAR) announced on Thursday.
The data was weaker than expected, as economists called for a smaller decline in the sales rate to 4.14 million. Year-over-year, sales were down 2.4% from March 2024.
The disappointing sales data is not having much impact on gold. The precious metal is struggling to attract new bullish momentum as prices have corrected sharply from their recent all-time highs of $3,500 an ounce. Spot gold last traded at $3,306.20 an ounce, up 0.55% on the day.
NAR Chief Economist Lawrence Yun warned that the struggling U.S. housing market is flashing warning signals on the health of the economy.
"Home buying and selling remained sluggish in March due to the affordability challenges associated with high mortgage rates," Yun said in the report. "Residential housing mobility, currently at historical lows, signals the troublesome possibility of less economic mobility for society."
The housing market continues to struggle as consumers face higher housing prices and elevated mortgages. Economists have warned that the global trade war could increase the costs for building materials, pushing housing prices higher.
At the same time, the Federal Reserve is firmly maintaining a neutral monetary policy stance as inflation pressures remain stubbornly elevated.
Looking at home prices, the report said that the median existing-home price for all housing types in March was $403,700, up 2.7% from one year ago.
"In stark contrast to the stock and bond markets, household wealth in residential real estate continues to reach new heights," Yun said. "With mortgage delinquencies at near-historical lows, the housing market is on solid footing. A small deceleration in home price gains, which was slightly below wage-growth increases in March, would be a welcome improvement for affordability. With real estate asset valuation at $52 trillion, according to the Federal Reserve Flow of Funds, each percentage point gain in home prices adds more than $500 billion to the household balance sheet."
A growing supply of homes for sale could help ease prices through the year. The report said the total housing inventory at the end of March was 1.33 million units, up 8.1% from February and 19.8% from one year ago. The supply of homes for sale currently sits at a 4.0-month supply at the current sales pace, up from 3.5 months in February.
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