| Before I begin this week’s update, I want to express my sympathies to everyone living through the fires. I am devastated by the destruction, pain and sorrow these fires have caused. I have lived in Los Angeles my entire life. I have never seen anything like this before and hope I never will again. The loss of homes, businesses, schools, markets, restaurants, stores, etc. is horrific. At present there are over 10,000 homes lost just in Los Angeles County, and tens of thousands more people are displaced waiting in limbo wondering about the status of their homes and when and how they will ever return. Our prayers are with the victims and residents of The Palisades, Malibu, Pasadena, Altadena, Sylmar, and other communities. Everyone here at Rodeo Realty and myself have you all in our thoughts and prayers.
Our Rodeo Realty family and I have been extremely fortunate to have assisted the community with their housing needs since 1986. Our clients have enriched our lives in so many ways. There are really no words strong enough to express how grateful we are to you for your support. We understand our role in your lives, and it is an obligation we take seriously and will always be here for you to help you in every way possible. We have spent the week scrambling to find housing for those affected and helping people understand their insurance coverage, the process of what is to come and other housing needs. This will be our role for quite some time, so do not hesitate to reach out to us. I also want to acknowledge our Realtors and staff that have lost their homes, the Rodeo Realty office that they work in, and nearly everything they own and have still shown up to our other offices every day to take care of their friends, relatives, clients, and anyone in need.
U.S. Hiring Surge in December – Employers add a quarter million new jobs in December -The Department of Labor and Statistics reported that 256,000 new jobs were added in December. It blew away economists who were surveyed by Dow Jones who forecasted 155,000 new jobs. The unemployment rate remained at 4.1%. Average hourly wages increased 3.9% year-over-year in December, over one percent above the current rate of inflation. Stock markets – The Dow Jones Industrial Average closed the week at 41,938.45, down 1.8% from 42,722.13 last week. It is down 1.4% year-to-date. The S&P 500 closed the week at 5,827.04, down 1.9% from 5,942.47 last week. The S&P is down 0.9% year-to-date. Nasdaq closed the week at 19,161.63, down 2.3% from 19,622.05 last week. It is down 0.8% year-to-date. Why are mortgage rates rising? In this environment where higher inflation leads to higher interest rates, good news becomes bad news for mortgage rates and bond yields. Mortgage rates and long-term bond yields increased to their highest levels in over a year this week. The better the economy, the more consumers spend. More people spending pushes prices higher and creates inflation. Inflation had dropped steadily and last September it was at its lowest levels since 2021 and the unemployment rate had risen to its highest levels in many years, but the inflation rate has increased for three straight months and the unemployment rate has dropped from where it was in September. It is good news that the economy is gaining strength and growing, but more people working, and wages rising is causing inflation to tick up. U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 4.77%, up from 4.60% last week. The 30-year treasury bond yield ended the week at 4.96%, up from 4.82% 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 January 9, 2025, were as follows: The 30-year fixed mortgage rate was 6.93%, up slightly from 6.91% last week. The 15-year fixed was 6.14%, up from 6.13% last week. The graph below shows the trajectory of mortgage rates over the past year.
Please stay safe!
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