Economic Update | Week Ending May 11, 2024

Economic news this week – Stock markets increased and mortgage rates dropped this week as it appears that we are finally seeing some signs that the economy is slowing. Up until last week, experts were puzzled as to how the labor market, retail sales, and inflation were picking up after almost two years of Fed rate hikes and other tightening measures. Last Friday’s jobs report had the number of new jobs added in April significantly lower than March. The Fed also announced that they were going to stop selling off their treasury bond portfolio, which has enabled long-term rates to drop. This week it was announced that new jobless claims increased for the first time this year. Consumer confidence dropped well below expectations. Usually when consumer confidence drops people cut back on spending. When spending slows inflation retreats. Investors feel that we have turned a corner. Next Monday the Producer Price Index will be released and on Wednesday the Consumer Price Index will be released. Analysts are expecting those reports to show some signs that inflation is beginning to moderate. That has pushed the Dow up for eight straight sessions. The S&P and Nasdaq have also rebounded strongly over the last two weeks.

Stock markets – The Dow Jones Industrial Average closed the week at 39,512.84, up 1.1% from 38,675.68 last week. It is up 4.8% year-to-date. The S&P 500 closed the week at 5,222.68, up 1.8% from 5,127.79 last week. The S&P is up 9.5% year-to-date. The Nasdaq closed the week at 16,340.87, up 1.1% from 16,156.33 last week. It is up 8.9% year-to-date.

U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 4.50%, unchanged from 4.50% last week. The 30-year treasury bond yield ended the week at 4.64%, almost unchanged from 4.66% last week. We watch bond yields because mortgage rates follow bond yields.

Mortgage rates – Every Thursday Freddie Mac publishes 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 May 9, 2024, were as follows: The 30-year fixed mortgage rate was 7.09%, down from 7.22% last week. The 15-year fixed was 6.38%, down from 6.47% last week.

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.

Real Estate sales figures for April will be released by the California Association of Realtors and the National Association of Realtors next week. You can get April’s data for your city, zip code’ or county on our website It is tabulated from the same data that the California Association of Realtors uses.

Have a great weekend!