Category: Economic Update

Snapping a two week losing streak stocks ended the week higher – In a holiday shortened week stocks rose. Tax reform was the focus of investors this week. While it seems likely that some changes will be made to the Senate and House proposals, a significant corporate tax rate reduction seems to be agreed on. It was also revealed that reductions on personal rates that expire, the corporate rate reductions are permanent. Experts are also expecting a 3.8% increase in November and December retail sales, which is just above last years holiday sale increase. The Dow Jones Industrial Average ended the week at 23,557.99, up from 23,358.24 last week. It’s up 19.2% year-to-date. The S&P 500 closed the week at 2,602.42, up from its close last week of 2,578.85. The S&P is up 16.2% YTD. The NASDAQ closed the week at 6,889.16, up from its last week’s close of 6,782.79. It’s up 28% year-to-date.

Bond yields unchanged this week – The 10-year Treasury bond closed the week at 2.34%, unchanged from 2.35% last week. The 30-year treasury yield ended the week at 2.76%, unchanged from 2.78% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.

Mortgage Rates unchanged this week – The November 22, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.92%, down slightly from 3.95% last week. The 15-year fixed was 3.32%, almost unchanged from 3.21% last week. The 5-year ARM was 3.22%, almost unchanged from 3.21% last week.

Extremely low supply of housing for sale causes a downtick in year-over-year sales in October, and continues to drive prices up – The California Association of Realtors reported that existing single family home sales totaled 431,020 in October on a seasonally annualized rate. That represents a 0.8% increase from September, but a 3.4% decrease from last October’s sales pace. The statewide median price was $546.430, up 6.1% from October 2016. The unsold inventory index dropped to a 3 month supply of homes for sale in October from 3.2 month supply in September. There was a 3.4 month supply of homes for sale in October 2016. Year-over-year there are 11.5% fewer homes for sale this October than last October. Pending home sales (homes that went under contract) also dropped 2.6% from last October. 

I hope you had a nice Thanksgiving and I wish you a great weekend!

Syd

Stocks end week lower after eight straight weeks of gains – Stocks dropped after the senate released their version of tax reform, partly because the corporate tax cut would not take effect until 2019. Companies had hoped that the cut in the corporate tax rate from 35% to 20% would take effect this year, as tax rates are usually retroactive at the beginning of the year that they are passed. There was also more uncertainty this week about whether either version would have enough votes to pass. The Dow Jones Industrial Average ended the week at 23,422.22, down from 23,539.19 last week. It’s up 18.5% year-to-date. The S&P 500 closed the week at 2,582.30, almost unchanged from its close last week of 2,587.84. The S&P is up 15.3% YTD. The NASDAQ closed the week at 6,750.94, down from its last week’s close of 6,764.44. It’s up 25.4% year-to-date. 

Bond yields rise this week – The 10-year Treasury bond closed the week at 2.40, up from 2.34% last week. The 30-year treasury yield ended the week at 2.88%, up from 2.82% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.

Mortgage Rates down slightly this week – The November 9, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.90%, slightly lower than 3.94% last week. The 15-year fixed was 3.24%, slightly down from 3.27% last week. The 5-year ARM was 3.22%, also almost unchanged from 3.23% last week.

Real Estate Organizations oppose both the senate and house tax plans – According to The National Association of Realtors, The California Association of Realtors, state’s Realtor associations, The National Association of Home Builders and other real estate groups, the proposed bills will actually increase taxes for middle class homeowners. Real estate groups oppose the plan because it cuts the mortgage interest deduction in half from the interest paid on a maximum of a $1,000,000 loan to the interest paid on a maximum of a $500,000 loan. It also eliminates deductions of state and local taxes. This would include property tax. The house bill would allow a maximum of $10,000 deducted a year in property tax, while the senate bill would allow no deduction for property tax. State and local taxes, which include property taxes, have been deductible since congress passed a federal income tax in 1909, which was implemented in 1913. This is a very controversial portion of tax reform. Neither plan has passed. It is possible that these changes may not be in the final bill. 

Have a great weekend,
Syd

U.S. Economy adds 261,000 jobs in October – Unemployment rate drops to 4.1% – The Bureau of Labor Statistics reported that the economy added 261,000 jobs in October. This was a rebound from September when the economy gained just 18,000 jobs in a revised estimate after the labor department initially reported a loss of 33,000 jobs, which marked the first month in seven years that jobs were lost. That revision makes October the 85th consecutive month of job gains. September’s disappointing figures were largely blamed by experts on job losses due to devastating hurricanes, which hit southern states and Puerto Rico. The 261,000 job gains represents that those experts were correct. The unemployment rate dropped to 4.1%, from 4.2% in September. It marks the lowest unemployment rate in 17 years. Wages were disappointing, as wages dropped last month. Wages grew 2.4% from one year ago. Previous months had gains, which had been 2.5% higher year-over-year. 

Stock markets closed higher for the eighth straight week, the longest streak since 2006 – Stocks rose again this week as more positive corporate earnings were released, The House released a tax plan which cut corporate taxes, The President nominated a new Fed Chief, The Federal Reserve did not increase rates at their policy meeting, and hiring rebounded in October. The Dow Jones Industrial Average ended the week at 23,539.19, up from 23,439.19 last week. It’s up 19.1% year-to-date. The S&P 500 closed the week at 2,587.84, up from its close last week of 2,581.07. The S&P is up 15.6% YTD. The NASDAQ closed the week at 6,764.44, up from its last week’s close of 6,701.26. It’s up 25.7% year-to-date. 

Bond yields drop this week – The 10-year Treasury bond closed the week at 2.34%, down from 2.53% last week. The 30-year treasury yield ended the week at 2.82%, down from 2.93% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.

Mortgage Rates unchanged this week – The November 3, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.94%, unchanged from 3.94% last week. The 15-year fixed was 3.27%, almost unchanged from 3.25% last week. The 5-year ARM was 3.23%, also almost unchanged from 3.21% last week. 

Economic update for the month ending October 31, 2017 

U.S. Economy adds 261,000 jobs in October – Unemployment rate drops to 4.1% – The Bureau of Labor Statistics reported that the economy added 261,000 jobs in October. This was a rebound from September when the economy gained just 18,000 jobs in a revised estimate after the labor department initially reported a loss of 33,000 jobs, which marked the first month in seven years that jobs were lost. That revision makes October the 85th consecutive month of job gains. September’s disappointing figures were largely blamed by experts on job losses due to devastating hurricanes which hit southern states and Puerto Rico. The 261,000 job gains represents that those experts were correct. The unemployment rate dropped to 4.1%, from 4.2% in September. It marks the lowest unemployment rate in 17 years. Wages were disappointing, as wages dropped last month. Wages grew 2.4% from one year ago. Previous months had gains which had been 2.5% higher year-over-year. 
Stock markets hit record highs just about every day in October – Third quarter corporate earnings boosted stock prices in October as most companies reported earnings that exceeded expectations. The Dow Jones Industrial Average ended the month at 23,348.74 up from its August 31 close of 22,405.08. The Dow is up over 19% year to date. The S&P 500 closed the month at 2,572.84, up from its August close of 2,519.36. The S&P is up over 15% year to date. The NASDAQ closed the month at 6,701.26, up from last month’s close of 6,495.26!!It’s up 25.7% year to date. 

Treasury Bond yields slightly higher in October – The 10-year Treasury bond closed on October 31, 2017 at 2.38%, up from 2.33% at the end of September. The 30-year treasury yield ended the month at 2.88%, up from 2.86% last month.

Mortgage Rates slightly higher in October – The November 2, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.94%, up from 3.83% on September 28, 2017. The 15-year fixed was 3.27%, up from last month’s close of 3.13%. The 5-year ARM was 3.23%, up from 3.20% on September 28. 

Third quarter GDP beats expectations – The Commerce Department reported that the Gross Domestic Product, the broadest measure of of growth in the economy, unexpectedly rose 3% in the third quarter after a 3,1% increase in the second quarter. Analysts expected that the rate of growth would be 2.5%, due to some slowing caused by hurricane damaged areas. 

September U.S. Existing Home Sales and Prices – The National Association of Realtors reported that existing home sales increased 0.7% in September from August sales levels. Year over year closed escrows on existing homes were 1.5% below last September’s pace. Most of that decline was attributed to hurricane damaged areas which showed large declines in sales. Existing home sales include re-sales of one to four unit homes, town-homes, condominiums, and Co-ops. The median price nationwide for an existing home increased 4.2% from September 2016, the 67th straight month of year over year increases. Total housing inventory was 1.6% higher in September than in August, but 6.4% below last September, representing its 28th straight month of year over year decreases in the amount of homes for sale. The unsold inventory index fell to a 4.2 month supply of homes for sale, down from a 4.5 month supply one year ago. 

U.S. New housing starts drop 4.7% in September – Hurricane damaged regions account for the drop – The Commerce Department reported that permits for new residential construction (single family and multi family) dropped 4.7% in September from August levels. Single family housing starts dropped 4.6%. The decline was attributed to hurricane damaged areas. Year to date housing starts were up 9.1% in September, compared to the first nine months of 2016. Breaking out single family housing, the hurricane damaged south posted a 15.3% decline in new housing starts in September. All other regions in the U.S. posted month over month gains. New permits for single family construction grew 15.7% in the western region in September over August levels. Multi family housing starts were down in just about every region across the country. 

California existing home sales and prices continue to increase in September – The California Association of Realtors reported that existing single family home sales totaled 436,920 in September on a seasonally adjusted annualized rate. That’s up 2.2% from August and 1.7% from last September. The median price paid for a home in California was 555,410 in September, down 1.8% from August, but up 7.5% from last September. The number of active listings continued to decline in September. They were down 11.2% from September 2016. The Unsold Inventory Index showed a 3.2 month supply of housing supply, up from 2.9 months in August, yet down from a 3.5 month supply in September 2016. Housing inventory levels are at record low; however, the number of sales are above or close to the highest numbers ever recorded as the number of listings are not keeping up with the brisk sales pace. A normal market has a 6 to 7 month supply of housing. 

Stocks markets close at record levels for 7th straight week – Stocks were higher again this week, reaching record levels for the seventh week in a row. These gains came in what was the busiest week for third quarter earnings. Several technology companies reported solid earnings, pushing the NASDAQ up 2.2% on Friday. Some other factors that bolstered stocks were: Congress appeared to be close to passing tax cuts, which include reducing the corporate tax rate substantially. Some congress people said it could be passed by thanksgiving. The first release of the third quarter GDP showed the economy grew at a 3% rate in the third quarter. The Dow Jones Industrial Average ended the week at 23,434.19, up from 23,328.64 last week. It’s up 18.6% year to date. The S&P 500 closed the week at 2,581.07, up from its close last week of 2,575.21. The S&P is up 15.3% YTD. The NASDAQ closed the week at 6,701.26, up from its last week’s close of 6,629.05. It’s up 24.5% year-to-date. 

Bond yields higher this week – The 10-year Treasury bond closed the week at 2.43%, up from 2.39% last week. The 30-year treasury yield ended the week at 2.93%, up from 2.89% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.

Mortgage Rates higher this week – The October 26, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.94%, up from 3.88% last week. The 15-year fixed was 3.25%, up from 3.19% last week. The 5-year ARM was 3.21%,up from 3.17% last week. 

Third quarter GDP beats expectations – The Commerce Department reported that the Gross Domestic Product, the broadest measure of growth in the economy, unexpectedly rose 3% in the third quarter after a 3,1% increase in the second quarter. Analysts expected that the rate of growth would be 2.5%, due to some slowing caused by hurricane damaged areas. 

September U.S. Existing Home Sales and Prices – The National Association of Realtors reported that existing home sales increased 0.7% in September from August sales levels. Year-over-year closed escrows on existing homes were 1.5% below last September’s pace. Most of that decline was attributed to hurricane damaged areas which showed large declines in sales. Existing home sales include re-sales of one to four unit homes, town-homes, condominiums, and Co-ops. The median price nationwide for an existing home increased 4.2% from September 2016, the 67th straight month of year-over-year increases. Total housing inventory was 1.6% higher in September than in August, but 6.4% below last September, representing its 28th straight month of year-over-year decreases in the amount of homes for sale. The unsold inventory index fell to a 4.2 month supply of homes for sale, down from a 4.5 month supply one year ago. 

Have a great weekend,
Syd

Stocks markets continue to rise – Indexes reach record highs for sixth straight week – U.S. stocks rose again this week, reaching record highs for the sixth week in a row. Market gains were attributed to additional third quarter company earnings that beat expectations. 20% of companies in the S&P 500, that have reported earnings for the third quarter, reported earnings growth of nearly 2%, and 76% of the companies have reported results above expectations. Disappointing earnings from GE, whose stock dropped sharply, were offset by across the board gains. Stocks also rallied after the Senate passed a 2018 budget resolution. We expect earnings to continue to rise at a solid pace through the remainder of the year. The Dow Jones Industrial Average ended the week at 23,328.63, up from 22,871.73 last week. It’s up 18% year-to-date. The S&P 500 closed the week at 2,575.21, up from its close last week of 2,563.17 The S&P is up 15% YTD. The NASDAQ closed the week at 6,629.05, up from its last week’s close of 6,605.80 It’s up 23.1% year-to-date. 

Bond yields higher this week – The 10-year Treasury bond closed the week at 2.39%, up from 2.28% last week. The 30-year treasury yield ended the week at 2.89%, up from 2.81% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.

Mortgage Rates almost unchanged – The October 19, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.88%, down from 3.91% last week. The 15-year fixed was 3.19%, down from 3.21% last week. The 5-year ARM was 3.17%, down slightly from 3.16% last week. Rates rose late in the week so next week’s rates will be slightly higher. 

U.S. new housing starts drop 4.7% in September – Hurricane damaged region accounts for the drop – The Commerce Department reported that permits for new residential construction dropped 4.7% in September. Single-family housing starts dropped 4.6% from August. The September decline was attributed to hurricane damaged areas. Year-to-date housing starts are up 9.1% from the same period last year. Breaking out single-family housing, the hurricane damaged South posted a 15.3% decline in single-family housing starts in September. All other regions in the U.S. posted month-over-month gains in new single-family housing starts. Month-over-month housing starts are up 15.7% in the western region. Multi-family housing starts were down in almost every region. 

California existing home sales and prices continue to creep up in September – The California Association of Realtors reported that existing, single-family home sales totaled 436,920 in September on a seasonally adjusted annualized rate. That’s up 2.2 percent from August and 1.7 percent from last September. The statewide median home price was $555,410, down 1.8 percent from August and up 7.5 percent from September 2016. Statewide active listings continued to decline in September, dropping 11.2 percent from a year ago. The unsold inventory index in September represented a 3.2 month supply of homes for sale, down from a 3.5 month supply in September of 2017, yet up from 2.9 months in August. 

Have a great weekend!
Syd

Stocks continue to rise – Indexes again at new record highs – Stocks rose in the first week of the third quarter’s earnings season. Most of the companies that have released earnings have been from the financial service sector. Of the companies that have reported, 81% had better-than-expected results. The only sector that had a bad week was health insurance stocks, which dropped after President Trump signed an executive order to cut off subsidy payments to insurance companies that provide Obamacare. Economic data from overseas was extremely positive and confirmed that the worldwide economy is continuing to improve. The Dow Jones Industrial Average ended the week at 22,871.73, up from 22,773.67 last week. It’s up 15.7% year-to-date. The S&P 500 closed the week at 2,553.17, up from its close last week of 2,549.33. The S&P is up 14% YTD. The NASDAQ closed the week at 6,605.80, up from its last week’s close of 6,590.19. It’s up 22.7% year-to-date.

Bond yields lower this week – The 10-year Treasury bond closed the week at 2.28%, down from 2.37% last week. The 30-year treasury yield ended the week at 2.81%, down from 2.91% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.

Mortgage Rates continue to creep up, yet the 30-year is still below 4% – The October 12, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.91%, up from 3.85% last week. The 15-year fixed was 3.21%, up from 3.15% last week. The 5-year ARM was 3.16%, down slightly from 3.18% last week. Rates were slightly lower at the end of the week.

U.S. Consumer Confidence highest rating in 13 years – The University of Michigan consumer sentiment index hit 101.1, the highest level since 2004. Since consumer confidence is directly related to consumer spending this index is closely watched as consumer spending accounts for approximately two-thirds of the economy. The survey also included data, which showed retail sales increased by 1.6% in September, the highest increase since March 2015.

Unfortunately, The California Association of Realtors and The National Association of Realtors have not released September sales figures. Those will be included in next week’s report.

Have a great weekend!

Syd

U.S economy loses 33,000 jobs in September – Unemployment rate drops to 4.2% – Wages rise – The Bureau of Labor Statistics reported that the economy lost 33,000 jobs in September, which marked the first month in seven years that the U.S. lost jobs. The unemployment rate dropped to 4.2%, from 4.4% in August. Wages grew 2.9% from one year earlier. Analysts discounted the report, and it had little effect on the markets, because they felt that September’s hurricanes and storms skewed the numbers. According to experts, jobs lost due to hurricanes were lower paying jobs, so unfortunately, wages up nearly 3% was not a reliable figure. They expect wage growth to be closer to 2.5% next month. They also expect the number of new jobs to rebound next month, as employers resume hiring, which they delayed due to weather concerns. Workers also had temporarily stopped their job search, which made the unemployment figure appear lower. 

Markets hit record highs again this week – Stocks were up this week as encouraging economic data showed upward trends in the manufacturing and services sectors. Auto sales were also higher. While Friday’s September employment report was weak, experts felt that the impact from recent hurricanes skewed the numbers. They expect the economy to remain healthy. The Dow Jones Industrial Average ended the week at 22,773.67, up from 22,405.09 last week. It’s up 15.2% year-to-date. The S&P 500 closed the week at 2,549.33, up from its close last week of 2,519.36. The S&P is up 13.9% YTD. The NASDAQ closed the week at 6,590.19, up from its last week’s close of 6,495.96. It’s up 22.4% year-to-date. 

Bond yields rise – The 10-year Treasury bond closed the week at 2.37%, up from 2.33% last week. The 30-year treasury yield ended the week at 2.91%, up from 2.86% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.

Mortgage Rates just slightly higher this week – The October 5, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.85%, almost unchanged from 3.83% last week. The 15-year fixed was 3.15%, almost unchanged from 3.13% last week. The 5-year ARM was 3.18%, almost unchanged from 3.20% last week. 

Home sales figures for September should be available next week. 

Have a great weekend!

Syd

Stock markets end September at record highs – Stock market indexes closed the week at record levels. Stocks have soared as investors were encouraged by the prospects of lower corporate tax rates. The White House released its proposed tax plan, which would cut the corporate tax rates from 35% to 20%. Oil also rose to just over $51 per barrel, which bolstered energy stocks. The Dow Jones Industrial Average ended the month at 22,405.09, up from its August 31 close of 21,948.10. The Dow is up over 13.4% year-to-date. The S&P 500 closed the month at 2,519.36, up from its August close of 2,471.65. The S&P is up 12.5% year-to-date. The NASDAQ closed the month at 6,495.26, up from last month’s close of 6,428.66. It’s up 20.5% year-to-date.  

Treasury Bond yields higher in September – The 10-year Treasury bond closed on September 29, 2017 at 2.33%, up from 2.17% at the end of August. The 30-year treasury yield ended the month at 2.86%, up from 2.73% last month.

Mortgage Rates remain near historic lows – The 30-year fixed mortgage rate remained under 4% in September. The September 28, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.83%, almost unchanged from 3.82% on August 31, 2017. The 15-year fixed was 3.13%, unchanged from last month’s close of 3.12%. The 5-year ARM was 3.20%, up from 3.14% on August 31, 2017. 

Employers add 157,000 new jobs in August – The Labor Department reported that The U.S. Economy added 157,000 non-farm jobs in August. Economists had expected a gain of 180,000 new jobs. The unemployment rate grew to 4.4% from 4.3% in July. Wage growth also stalled growing just .1% over July and up just 2.5% from last August. The September figures will be out next Friday. September figures will be included on the monthly economic post card and email.

Consumer Prices rise in August – The Labor Department reported that its Consumer Price Index rose 0.4 percent in August after edging up just 0.1 percent in July. August’s gain was the largest in seven months and lifted the year-on-year increase in the CPI to 1.9 percent from 1.7 percent in July. Economists had forecast the CPI rising 0.3 percent in August and climbing 1.8 percent year-on-year. Gasoline prices surged 6.8% for consumers as refineries shut down due to hurricanes. This should just be a temporary spike and added to the CPI increase. The Core CPI, which strips out volatile food and energy, increased 0.2% in August. Year-over-year Core CPI has increased 1.7%. Inflation, while a little higher in August, is still below the Fed’s target level. We watch inflation because higher inflation drives interest rates up. Low inflation keeps rates tame.

California home sales and prices continue to rise in August – The California Association of Realtors released its August Sales and Price Report. Despite tight inventory existing, single family home sales totaled 427,630 in August on a seasonally adjusted annualized rate. That represented a 1.5% increase month-over-month from July and a 1.3% increase from last August. The Los Angeles region registered a 4.4% gain in the number of sales year-over-year. The median price paid for a home in California was $565,330, up 2.9% from July and 7.2% from August 2016. C.A.R.’s Unsold Inventory Index fell to a 2.9-month supply of housing in August, down from 3.2 months in July, as there were too few new listings to keep up with strong sales growth. 

U.S. Existing home sales slightly lower in August – Existing home sales data released by The National Association of Realtors showed that existing-home sales dropped 1.7% on a seasonally adjusted annual rate in August from July’s sales levels, as tight inventory has affected home sales. For the year, the number of existing homes sold on a seasonally adjusted annual rate in August was 0.2% above last August’s sales pace. Prices continue to rise nationally. The median price aid for a home in August was 5.6% higher than one year ago. Housing inventory continued to decline. The number of homes for sale declined 6.5% from August 2016. The 27th straight month of year-over-year declines in inventory levels. The unsold inventory index dropped to a 4.2 month supply, down from 4.5 months one year ago.

Economic update for the week ending September 30, 2017

Markets close the week again at record highs – Stock market indexes closed the week at record levels. Stocks have soared as investors were encouraged by the prospects of lower corporate tax rates. The White House released its proposed tax plan, which would cut the corporate tax rates from 35% to 20%. Oil also rose to just over $51 per barrel which bolstered energy stocks. The Dow Jones Industrial Average ended the week at 22,405.09, up from 22,349.59 last week. It’s up 13.4% year-to-date. The S&P 500 closed the week at 2,519.36, up from its close last week of 2,502.22. The S&P is up 12.5% YTD. The NASDAQ closed the week at 6,495.96, a record high, up from its last week’s close of 6,426.22. It’s up 20.7% year-to-date. 

Bond yields higher this week – The 10-year Treasury bond closed the week at 2.33, up from 2.26% last week. The 30-year treasury yield ended the week at 2.86%, up from 2.80% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.

Mortgage Rates unchanged this week – The September 28, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.83%, unchanged from 3.83% last week. The 15-year fixed was 3.13%, unchanged from 3.13% last week. The 5-year ARM was 3.20%, up from 3.17% last week. 

Have a great weekend!
Syd

Stocks hit record highs again this week – Stocks were slightly higher this week following large gains the previous week. The Federal Reserve announced that it would begin its balance sheet normalization program next month. They will slowly sell off bonds and mortgage securities they purchased during the recession to help the housing market, lower long term rates, and add liquidity to the economy. They also announced that they would keep the federal funds rate between 1% and 1.25%, which was good news to investors. They said that while the labor market’s strong inflation is below 2%, which is lower than the Fed target rate. The Dow Jones Industrial Average ended the week at 22,349.59, up from 22,268.34 last week. It’s up 13.1% year-to-date. The S&P 500 closed the week at 2,50.22, up from its close last week of 2,500.23. The S&P is up 11.8% YTD. The NASDAQ closed the week at 6,426.22, down slightly from its all time high at last week’s close of 6,448.37. It’s up 19.4% year-to-date. 

Bond yields higher this week – The 10-year Treasury bond closed the week at 2.26%, up from 2.20% last week. The 30-year treasury yield ended the week at 2.80%, up from 2.77% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.

Mortgage Rates rise this week – The September 21, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.83%, up from 3.78% last week. The 15-year fixed was 3.13%, up from 3.08% last week. The 5-year ARM was 3.17%, up from 3.13% last week. Rates were a little higher at the end of the week so next week’s survey rates could be higher. 

California home sales and prices continue to rise in August – The California Association of Realtors released its August Sales and Price Report. Despite tight inventory existing, single family home sales totaled 427,630 in August on a seasonally adjusted annualized rate. That represented a 1.5% increase month-over-month from July and a 1.3% increase from last August. The Los Angeles region registered a 4.4% gain in the number of sales year-over-year. The median price paid for a home in California was $565,330, up 2.9% from July and 7.2% from August 2016. C.A.R.’s Unsold Inventory Index fell to a 2.9 month supply of housing in August, down from 3.2 months in July, as there were too few new listings to keep up with strong sales growth. 

Have a great weekend!
Syd

Stock market indexes hit record highs – Markets closed the week at record highs as news that an outline of a tax reform plan would be released later this month. Recent compromise on other issues had investors feeling that tax cuts or tax reform could improve prospects for growth in the coming years. The Dow Jones Industrial Average ended the week at 22,268.34, up from 21,797.79 last week. It’s up 12.7% year-to-date. The S&P 500 closed the week at 2,500.23, up from its close last week of 2,461.43. The S&P is up 11.7% YTD. The NASDAQ closed the week at 6,448.37, up from last week’s close of 6,360.19. It’s up 19.8% year-to-date. 

Bond yields higher this week – The 10-year Treasury bond closed the week at 2.20%, up from 2.06% last week. The 30-year treasury yield ended the week at 2.77%, up from 2.67% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.

Mortgage Rates unchanged last week – but higher by week’s end – The September 14, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.78%, unchanged from 3.78% last week. The 15-year fixed was 3.08%, unchanged from 3.08% last week. The 5-year ARM was 3.13%, down slightly from 3.15% last week. Rates rise at the end of the week and are now slightly higher. 

Consumer Prices rise in August – The Labor Department reported that its Consumer Price Index rose 0.4 percent in August after edging up just 0.1 percent in July. August’s gain was the largest in seven months and lifted the year-on-year increase in the CPI to 1.9 percent from 1.7 percent in July. Economists had forecast the CPI rising 0.3 percent in August and climbing 1.8 percent year-on-year. Gasoline prices surged 6.8% for consumers as refineries shut down due to hurricanes. This should just be a temporary spike and added to the CPI increase. The Core CPI, which strips out volatile food and energy, increased 0.2% in August. Year-over-year Core CPI has increased 1.7%. Inflation, while a little higher in August, is still below the Fed’s target level. 

Have a great weekend!
Syd