U.S. pending home sales fall less than expected in October, gold price still digesting GDP surprise

(Kitco News) Gold is trading largely unchanged as the U.S. pending home sales surprised slightly on the upside in October despite the fifth consecutive monthly drop.

The U.S. pending home sales were down 4.6% in October following a drop of 8.7% in September, the National Association of Realtors (NAR) said on Wednesday. The consensus forecast called for a decline of 5%. 

The pending home sales index was at 77.1 last month after registering 80.8 in September. On an annual basis, pending home sales were down 37% from October 2021. 

Rising interest rates are weighing on the U.S. housing demand, said Lawrence Yun, NAR’s chief economist Lawrence Yun.

“October was a difficult month for home buyers as they faced 20-year-high mortgage rates,” said Yun. “The West region, in particular, suffered from the combination of high interest rates and expensive home prices. Only the Midwest squeaked out a gain.”

The rest of the year could see an uptick in demand as mortgage rates seem to have peaked, he added.

Economists pay close attention to the pending home sales numbers because the index is seen as a forward-looking barometer for the housing market. A lag of a month or two usually exists between a contract and a completed sale.

Following the data release, gold was largely unchanged after paring back early-morning gains following better-than-expected Q3 GDP revision. February Comex gold futures were last at $1,767.10, up 0.19% on the day.