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Stock markets – Dow and Nasdaq near all-time highs – While the CPI (Consumer Price Index) showed that year-over-year inflation remained at 3.1% in November, unchanged from October, Fed Chairman Powel announced that the Fed would leave rates unchanged for the third straight meeting. He also stunned the markets by stating that the Fed’s efforts to reduce inflation had taken hold and that he felt that inflation was now dropping faster than anticipated. He even left the door open for rate drops next year. It was a complete reversal from statements made in October where he was threatening more rate hikes. Retail sales also jumped in November. Investors rushed back to stocks and bond yields and mortgage rates fell significantly. The Dow Jones Industrial Average closed the week at 37,309.22, up 2.8% from 36,247.87 last week. It is up 12.6% year-to-date. The S&P 500 closed the week at 4,719.07, up 2.5% from 4,604.37 last week. It is up 22.9% year-to-date. The Nasdaq closed the week at 14,813.92, up 2.8% from 14,403.97 last week. It is up 41.5% year-to-date. U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 3.91%, down from 4.23% last week. The 30-year treasury bond yield ended the week at 4.00%, down from 4.31% last week. We watch bond yields because mortgage rates follow bond yields. Mortgage rates drop below 7% -Every Thursday Freddie Mac publishes home mortgage interest rates based on a survey of mortgage lenders throughout the week. The Freddie Mac Primary Mortgage Survey reported that mortgage rates for the most popular loan products as of December 14, 2023, were as follows: The 30-year fixed mortgage rate was 6.95%, down from 7.03% last week. The 15-year fixed was 6.38%, up from 6.26% last week. It was 6.56% two weeks ago. Rates were lower at the end of the week. We saw lenders quoting 30-year loans in the mid to low 6% range on Friday. The graph below shows the trajectory of mortgage rates over the past year. Freddie Mac was chartered by Congress in 1970 to keep money flowing to mortgage lenders in support of homeownership and rental housing. Their mandate is to provide liquidity, stability, and affordability to the U.S. housing market. November home sales data for California and the U.S. will be released next week by the California Association of Realtors and the National Association of Realtors. You can get November data now for your city or zip code on our website, RodeoRe.com. Have a great weekend! |
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