The U.S. housing market is displaying signs of stabilization, despite a smaller-than-anticipated drop in new home sales last month. However, this positive data has had minimal effect on the gold market, which remains close to the $2,700 per ounce mark.
According to a report released by the U.S. Census Bureau and the Department of Housing and Urban Development, new home sales decreased by 4.7% to a seasonally adjusted annual rate of 716,000 homes. This figure is below the revised rate of 751,000 for July but reflects a significant 9.8% increase compared to August 2023.
Although the decline in sales was evident, the report surpassed economists’ expectations, who had predicted a sharper fall to 699,000 units.
In contrast, the gold market continues to hold steady near record levels, with December gold futures trading at $2,689.80 per ounce, marking a 0.48% increase for the day.
Throughout 2024, the housing sector has grappled with the Federal Reserve’s stringent monetary policies. However, economists are optimistic about a potential turnaround, following the central bank’s recent 50-basis-point rate cut, which may pave the way for further easing measures.
The Federal Reserve has indicated that the Fed Funds rate could potentially drop to 3% by 2026.
While mortgage rates are projected to decline, home prices remain high. The median sales price for new houses sold in August was reported at $420,600, with the average price reaching $492,700.
Economists emphasize that an increase in the supply of new homes is essential for a decrease in prices. Currently, the report indicates there are approximately 467,000 homes available for sale, which translates to a supply that would last 7.8 months.
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