Economic update for the week ending April 9, 2022

Stock markets closed lower this week – Stock markets dropped this week mainly on interest rate fears. Minutes from the last Fed meeting were released on Wednesday. They showed that some Fed members supported a ½% rate hike, rather than the ¼% hike the Fed settled on. Other comments suggested that the Fed expected continued strength in the economy and intended to do more rate hikes and raise rates quicker than previously expected in order to keep the economy from overheating and curb inflation. First-quarter corporate profit reporting season starts next week. Analysts expect them to exceed expectations. New unemployment claims continue to hit 60-year lowsTreasury yields and mortgage rates are continuing to climb as well. While higher rates seem concerning, and they are, rates rise when the economy is strong and fall when it is not, so increasing rates point to strength in the economy. The Dow Jones Industrial Average closed the week at 34,721.12, down 0.3% from 34,818.25 last week. It’s down 4.5% year-to-date. The S&P 500 closed the week at 4,488.28, down 1.3% from 4,545.86 last week. The S&P is down 5.8% year-to-date. The NASDAQ closed the week at 13,711.00, down 3.9% from 14,261.50 last week. It is down 12.4%, year-to-date. 

U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 2.72%, up from 2.38% last week. The 30-year treasury bond yield ended the week at 2.76%, up from 2.44% last week. We watch bond yields because mortgage rates often follow treasury bond yields. 

Mortgage rates – Home mortgage rates continued to increase this week. Freddie Mac Primary Mortgage Survey reported that mortgage rates as of April 7, 2022 for the most popular loan products were as follows: The 30-year fixed mortgage rate was 4.72%, up from 4.67% last week. The 15-year fixed was 3.91% up from 3.83% last week. The 5-year ARM was 3.56%, up from 3.50% last week. 

March home sales figures will not be released by The California Association of Realtors and the National Association of Realtors until the third week of April. Those figures will be in my April 23, 2022 weekly report. You can get March sales figures for your city or zip code from my website now.