Many people in the market follow indices for the price of gold. Every time these indices are announced, there is an inevitable movement in the market. The last index was about consumer interest in the housing market. So how did the index take shape? Let’s look at the details.
Declining consumer interest impacts US housing market
There is a decline in consumer interest in the US housing market. Accordingly, there was a decrease in housing purchases for the third month in a row. However, this disappointing trend did not affect the gold market as prices remained stable above the critical support level of $1,900 per ounce.
The National Association of Realtors (NAR) reported that the pending home sales index in the US dropped to 76.5 in May. Accordingly, after the revised 0.4% decline in April, there was a 2.7% decrease. These figures fell short of expectations as consensus estimates projected a smaller 0.5% decline. Compared to May 2023 and the same month of the previous year, pending house sales have decreased by 22.2%.
Gold market remains resilient amid housing market woes
While the housing market shows signs of weakness, the gold market continues to withstand selling pressure. On the other hand, while this durability is in question, prices also remain constant. Gold futures for August delivery were down 0.70% on the day, trading at $1,908.90 an ounce.
NAR chief economist Lawrence Yun acknowledges the decline in contract signing, but stresses the overall resilience of the housing market. Yun underlines that despite the sluggish demand, there are still about three offers for each listing. However, the persistently low housing stock continues to hinder the full realization of housing demand. Although home builders have increased production, the supply from new builds takes time and remains short. However, it should be noted that this situation has no effect on the price of gold.
Housing market facing challenges
The housing market faced challenges throughout 2023 due to the aggressive monetary policies of the Federal Reserve. Accordingly, this situation caused the mortgage rates to rise. In addition, limited stocks in the housing market contributed to the rise in prices. On the other hand, many potential first-time home buyers have been excluded from the market.
cryptocoin.com Overall, the US housing market is facing a decline in consumer interest. Accordingly, this is evident from the fact that housing purchase activities have decreased for months in a row. However, the gold market maintains its resistance in the face of this slowdown. The Federal Reserve’s monetary policies and low housing stocks continue to affect the housing market. Accordingly, it makes it difficult for potential buyers to enter the market. Despite these challenges, the housing market has resilience. In addition, the stable performance of the gold market gives an idea about the current state of the US economy.
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