Spot Gold Slides To $2,330 Per Ounce After U.S. Existing Home Sales Disappoint In May

(June 21, 2024 - Ernest Hoffman)

(Kitco News) - Gold prices fell to fresh session lows after the latest data showed the U.S. housing market underperformed expectations in May.

Total existing home sales, including single-family homes, townhomes, condominiums and co-ops, fell 0.7% to a seasonally adjusted annual rate of 4.11 million in May, below the 0.3% decline to 4.12 million expected and also lower than the revised 4.14 million recorded in April. Year-over-year, sales were down 2.8% compared to May 2023.

Gold prices had already plummeted at the market open, but they fell to a new session low of $2,330.93 in the minutes after the housing data was released, and last traded at $2,333.71, down 1.12% on the day at the time of writing.

Among the four major U.S. regions sales slid month-over-month in the South but were unchanged in the Northeast, Midwest, and West. Year-over-year, sales rose in the Midwest but fell in the Northeast, South, and West.

“Home prices reaching new highs are creating a wider divide between those owning properties and those who wish to be first-time buyers,” said NAR Chief Economist Lawrence Yun. “The mortgage payment for a typical home today is more than double that of homes purchased before 2020.”

Total housing inventory was 1.28 million units at the end of May, up 6.7% from April and up 18.5% from the 1.08 million units recorded one year ago. Unsold inventory currently sits at a 3.7-month supply at the current sales pace, up from 3.5 months in April and higher than the 3.1 months in May of 2023.

The median existing home price in May was $419,300, the highest price ever recorded and an increase of 5.8% from the $396,500 price of one year ago, the report noted. All four U.S. regions registered price gains.

Economists continue to pay close attention to the U.S. housing market as it is a major contributor to economic activity. The housing sector has struggled as the Federal Reserve has aggressively raised interest rates at the fastest pace in 40 years.