Gold prices pare gains as U.S. existing home sales fall 1% in December
Gold prices have given up their earlier gains after the latest data showed the U.S. housing market declined beyond expectations in December.
Existing home sales fell 1% last month against expectations for a 0.3% increase, and following a +0.8% print in November, according to National Association of Realtors (NAR) data published on Friday morning.
Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – fell to a seasonally adjusted annual rate of 3.78 million in December, down from 3.82 million in November. Year-over-year, sales fell 6.2% compared to December 2022, to 4.09 million, its lowest level in nearly 30 years.
Among the four major U.S. regions, sales slipped in the Midwest and South, rose in the West and were unchanged in the Northeast. All four regions experienced year-over-year sales decreases.
“The latest month’s sales look to be the bottom before inevitably turning higher in the new year,” said NAR Chief Economist Lawrence Yun. “Mortgage rates are meaningfully lower compared to just two months ago, and more inventory is expected to appear on the market in upcoming months.”
Total housing inventory was 1.00 million units at the end of December, down 11.5% from November but up 4.2% from the 960,000 units recorded one year ago. Unsold inventory currently sits at a 3.2-month supply at the current sales pace, down from 3.5 months in November but up from 2.9 months in December of 2022.
The median existing-home price for all housing types in December was $382,600, an increase of 4.4% from the $366,500 posted in December 2022. All four U.S. regions saw price increases.
“Despite sluggish home sales, 85 million homeowning households enjoyed further gains in housing wealth,” Yun added. “Obviously, the recent, rapid three-year rise in home prices is unsustainable. If price increases continue at the current pace, the country could accelerate into haves and have-nots. Creating a path towards homeownership for today’s renters is essential. It requires economic and income growth and, most importantly, a steady buildup of home construction.”
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.
Gold prices fell following the housing data, with spot gold declining slightly from $2,029.79 just before the 10 am EST release to $2,023.89 at the time of writing, flat on the day.
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