Economic update for the week ending September 24, 2016

Stocks rally as The Fed forgoes rate hike, but retreat on Friday – Stocks rose this week after The Federal Reserve announced that they decided to leave rates unchanged at the conclusion of their Open Market Committee Meeting. They did state that they were open to a rate increase soon. Stocks had a volatile two weeks as speculation of whether or not a rate increase was coming moved the market. It looks like we will see more of the same before the next Fed meeting. Stocks dropped sharply Friday erasing most of the week’s gains. The largest drops were in energy, and mining as oil dropped over 4% to $44 a barrel. Stocks were up for the week. The Dow Jones Industrial Average closed the week at 18,261.45, up from 18,123.80 last Friday. The S&P 500 closed the week at 2,164.69, up from 2,139.16 last week. The NASDAQ closed the week at 5,305.75, up from last week’s close of 5,244.57.

Bond yields down slightly this week after three weeks of slight increases – The 10 year U.S. Treasury Bond yield closed the week at 1.62%, down from 1.70% last Friday. The 30-year U.S. Treasury Bond closed at 2.34%, down from 2.44% last week. Mortgage rates follow bond yields so we watch bond yields closely.

Mortgage rates unchanged this week – The Freddie Mac Primary Mortgage Survey released on September 22, 2016 showed that average mortgage rates from lenders surveyed for the most popular mortgage products were as follows: The 30-year fixed rate average was 3.48%. The 15-year fixed average rate was 2.76%. The 5/1 ARM average rate was 2.80%. 

Southern California home sales hit 10 year high in August – Data firm, CoreLogic reported that 23,278 new and existing single family homes sold in August in their 6 county Southern California region. That number represents a 10 year high and almost a 10% increase in the number of homes sold last August. The median price was flat in August, but up 6.2% from one year ago, according to CoreLogic.

California pending home sales show increase in homes under contract – The California Association of Realtors reported that the number of existing home sales increased 6.4% in August from August 2015 levels. Year over year the number of pending sales increased in all regions of the state with the Southern California region posting the largest gain, up 9.7% from August 2015. Pending existing single family homes include all resale detached and attached homes. 

U.S. existing home sales ease up pace in August – The National Association of Realtors reported that the number of existing homes sold nationally declined 0.9% to a seasonally adjusted annualized rate of 5.33 million homes in August from a rate of 5.38 million in July. Year over year the pace of existing homes sold, which include all resale single family, condominiums, town-homes and co-ops, increased just 0.8% from a seasonally adjusted annual rate of 5.29 million homes last August.

Have a great weekend!