US home sales plunge

US home sales have plunged almost 20% for the month of October in a scary move that could well be signalling mortgage stress is simply too much for want-to-be homeowners. 

And closer to home, we’re seeing a similar trend. While much of our social service-oriented news focuses on the lack of affordable housing, conservative news points out a simple fact. It is cheaper to rent than to purchase a home. 

The average price to purchase a 3-bedroom home in Australia is $650,000. Assuming you’ve placed a $50,000 deposit, leaving a $600,000 mortgage you’ll be paying around $3500 a month (plus rates and house maintenance). If you’re renting a 3 bedroom home, you’ll be spending around $750 a week (no rates or maintenance). So with many Aussies struggling with affordability of housing, the simple math of whether to rent or buy gives a pretty clear winner at the moment. *Not to say we don’t have an affordability problem, especially as ideally rent or housing shouldn’t be more than 30% of your gross income.

US GDP for the quarter measured at a consistent pace as in previous quarters, currently sitting at 2.8%. Consumer spending expanded at 3.5%, accounting for 2/3 of GDP. It can be assumed that the remaining 1/3 (production and manufacturing) is not doing as well as consumer spending. All in all the FED seems confident that growth is stable and should lead into a strong retail season for Christmas.

Gold and Silver look to be see-sawing, trying to find a new floor amongst a range of positive and negative worldwide news. We’ve just read that the Israel/Hezbollah ceasefire seems to be broken after a few short days, which will influence bullion pricing direction.

Enjoy today’s forecasts.

Gold daily chart, with 200MDA

Silver daily chart, with 200MDA

US500, with 200MDA

ASX200, with 200MDA

Gold Futures Technical Analysis

Gold Futures monthly analysis continues to recommend a STRONG BUY with Weekly analysis a Strong Buy signal.

Technical indicators - Monthly Projections

 Summary for Monthly Forecast: Strong Buy

*Not financial advice, please DYOR before any investment decisions you make.