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(Kitco News) – According to the latest report from the National Association of Realtors (NAR), the gold market is on the rise even though the price remains below $ 1,700 an ounce as fewer Americans start the home buying process.
On Wednesday, the NAR said its pending home sales index fell 10.6% in February to 110.3, down from the 2.8% drop in January. The latest housing data fell short of expectations; according to consensus forecasts, economists expected a decline of 3.1%.
For the year, pending home sales are down 0.5%, according to the report.
The gold market isn’t seeing much reaction to the latest real estate market data as prices trade 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 figures, as the index is viewed as a forward looking barometer for the housing market. There is usually a delay of a month or two between a contract and a final sale.
Lawrence Yun, chief economist of NAR, said in the report that low housing inventories were having an impact on the signing of contracts. He added that housing demand remains strong even as mortgage rates rise, pushed up by the sharp rally in the 10-year bond yield, which hit its highest level in 14 months.
Although mortgage rates are increasing, Yun Yun said they are expected to remain relatively low, at a maximum of 3.5% in 2021. He added that the rates are still advantageous for both potential buyers and current homeowners who are considering refinancing.
Warning: The opinions expressed in this article are those of the author and may not reflect those of 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. This is not a solicitation to exchange commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for any loss and / or damage resulting from the use of this publication.
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