Economic update for the week ending August 26, 2017

Stocks higher this week – Stocks rose this week after two previous weeks of declines. Stocks have performed strongly in the first two thirds of the year. Stock market indexes, while off the record highs hit just a few weeks ago, have logged double digit gains for the first time since 2013. The Dow Jones Industrial Average ended the week at 21,814.67, up from 21,674.51 last week. The S&P 500 closed the week at 2,443.05, up from its close last week of 2,426.55. The NASDAQ closed the week at 6,265.64, up from last week’s close of 6,216.53. 

Bond yields almost unchanged this week – Remaining near the lowest levels of the year – The 10-year Treasury bond closed the week at 2.17%, almost unchanged from 2.19% last week. The 30-year treasury yield ended the week at 2.75%, slightly down from 2.78% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.

Mortgage Rates remain under 4% – The 30-year fixed rates are about the lowest they have been in almost a year. Short term rates have risen. The August 24, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.86%, down slightly from 3.89% last week. The 15-year fixed was 3.16%, down slightly from 3.17% last week. The 5-year ARM was 3.17%, up slightly from 3.16% last week. 

Fewer homes sold nationwide in July than June, yet still more than one year ago – The National Association of Realtors reported that total home sales slipped 1.3% in July from June’s sales pace level. Year-over-year the pace of home sales were still 2.1% higher than last July. Prices have continued to rise. The median price was 6.2% higher this July than July 2016. That marked the 65th straight month of year-over-year price increases. Inventory levels continued to shrink. The number of homes for sale nationwide was down 9% from one year ago. The unsold inventory nationwide represents a 4.2 month supply. That is down from a 4.8 month supply last July. Tight supply is causing prices to rise. Total existing home sales include all re-sale single family one-to-four unit homes, condominiums, co-ops, and town homes. 

Have a great weekend!