Markets moved higher this week as tensions in the Middle East eased following a memorandum of understanding that is expected to end the recent conflict. Oil prices, which had surged on fears of supply disruptions, retreated sharply as concerns over shipping through the Strait of Hormuz diminished. The decline in oil prices helped lift investor confidence and pushed stock markets higher as fears of a broader energy shock subsided.

Despite the positive news, interest rates provided little relief. The Federal Reserve left short-term interest rates unchanged this week and signaled that inflation remains a concern. As a result, Treasury yields and mortgage rates changed very little, with 30-year mortgage rates remaining in the mid-6% range. Overall, the economy continues to show resilience with steady employment, moderating inflation, and solid consumer spending, but higher borrowing costs remain a challenge for homebuyers and businesses alike.

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 June 18, 2026, were as follows: The 30-year fixed mortgage rate was 6.47%, down from 6.52% last week. The 15-year fixed was 5.81%, down slightly from 5.84% last week.

The graph below shows the trajectory of mortgage rates over the past year. 

Stock markets – The Dow Jones Industrial Average closed the week at 51,564.70, up 0.7% from 51,202.26 last week. It is up 7.3% year-to-date from 48,063.29 on December 31, 2025. The S&P 500 closed the week at 7,500.58, up 0.9% from 7,431.36 last week. The S&P is up 9.6% year-to-date from 6,845.50 on December 31, 2025. The Nasdaq closed the week at 26,517.93, up 2.4% from 25,888.84 last week. It is up 14.1% year-to-date from 23,241.99 on December 31, 2025.

U.S. Treasury Bonds – The 10-year treasury bond closed the week yielding 4.46%, almost unchanged from 4.47% last week. The 30-year treasury bond yield ended the week at 4.90%, down from 4.97% last week. We watch bond yields because mortgage rates follow bond yields.

Home sales figures are released on the third week of the month for the previous month by the National Association of Realtors and the California Association of Realtors. Here is a summary of the May existing home sales reports.

U.S. existing-home sales – April 2026 – The National Association of Realtors reported that existing-home sales totaled 4.17 million units on a seasonally adjusted annualized rate in May, up 3.2% from the number of homes sold last May. The median price paid for a home in the U.S. in May was $429,300, up 1.3% year-over-year from $423,700 one year ago.

California existing-home sales – The California Association of Realtors reported that existing-home sales totaled 268,810 on an adjusted annualized basis in May, down 3.1% from 277,360 in April. The statewide median price paid for a home was $930,260 in May, up 3.1% from $909,410 last May. The increase in the median price was attributed to more homes selling in the higher range than the lower range, as higher price range buyers have been less impacted by gas prices, inflation, etc. They also have more money in the stock markets, which are at or near record highs.

Have a great weekend!