Economic Update for the week ending October 17, 2020


Stock markets slightly higher this week – This week stocks vacillated once again with investors buying and selling based on positive and negative developments in the state of negotiations of another round of a coronavirus stimulus package. Data released on retail sales and consumer sentiment exceeded expectations. There was also some pullback because of an increase of coronavirus cases both here and abroad, and stalls in two clinical vaccine trials. Stocks ended the week higher. The Dow Jones Industrial Average closed the week at 28,606.31, up 0.1% from 28,586.90 last week. It’s up 0.2% year-to-date. The S&P 500 closed the week at 3,483.81, up 0.2% from 3,477.13 last week. It’s up 7.8% year-to-date. The NASDAQ closed the week at 11,671.56, up 0.8% from 11,579.94 last week. It’s up 30.1% year-to-date.

U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 0.76%, down slightly from 0.79% last week. The 30-year treasury bond yield ended the week at 1.52%, down from 1.58% last week.

Mortgage rates – The October 15, 2020, Freddie Mac Primary Mortgage Survey reported mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate average was 2.81%, down from 2.87% last week. The 15-year fixed was 2.35%, almost unchanged from 2.37% last week. The 5-year ARM was 2.90%, unchanged from 2.89% last week.

The September housing sale data is being officially released on Monday. Our contacts at the California Association of Realtors tell us that there were 489,590 existing home sales on an annualized basis in September. That’s the highest number I can ever remember. It represents a 21.2% increase from the number of homes sold in September 2019. The median price paid for a home in California was $712,430, up 17.6% from the median price last September. Inventory levels were lower than one year ago. There was just a two month supply of homes for sale in September. Next week’s report will include the number of homes sold, the median price paid for a home in LA, Ventura, and Orange Counties. It will also include inventory levels and will be posted on the Rodeo Realty Blog on Monday.