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Stock markets – The Dow Jones Industrial Average closed the week at 39,118.36, down 0.1% from 39,150.33 last week. It is up 3.8% year-to-date. The S&P 500 closed the week at 5,460.48, unchanged from 5,464.62 last week. The S&P is up 14.5% year-to-date. The Nasdaq closed the week at 17,732.60, up 0.2% from 17,689.36 last week. It is up 18.1% year-to-date.

U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 4.36%, up from 4.25% last week. The 30-year treasury bond yield ended the week at 4.51% up from 4.39% last week. We watch bond yields because mortgage rates follow bond yields.

Economic Update for the Month Ending
June 30, 2024

Inflation shows signs of cooling – This month several reports suggested that inflation was cooling after picking up earlier in the year. Key inflation data released this month included: The Consumer Price Index (CPI) showed that consumer prices increased 3.3% year-over-year in May, down from a 3.4% year-over-year increase in April. On a month-over-month basis, consumer prices held flat for the first time since July 2022. Core CPI, which excludes food and energy, increased 3.4% year-over-year, its smallest annual increase since April 2021. CPI peaked in June of 2022 at 9.1%, worked its way down to 3% in June 2023, but worked its way back up to 3.5% year-over-year in March 2024. It has remained stubborn, but the year-over-year increase has moderated for three straight months. The Producer Price Index (PPI), a gauge of prices that producers get for their goods and services in the open market, showed that wholesale prices declined 0.2% month-over-month in May, following April’s surprise 0.5% increase. Year-over-year the PPI increased 2.2%. The core PPI increased 2.3% year-over-year. Economists had expected a 2.5% increase, so this was also good news. The Personal Consumption Expenditure Index (PCE), the Fed’s preferred gage of inflation, was released on June 28. It showed that the 12-month inflation rate was 2.6%. The Core PCE, which strips out volatile food and energy prices, also showed a 2.6% year-over-year increase. The Fed is looking to get this index down to their 2% target rate and it is finally beginning to look like they are making significant progress. Experts feel that they will begin to cut their key interest rates from their 25-year high levels later in the year.

The graph below shows the trend of the CPI rate since 2021.

Stock Markets – The Dow Jones Industrial Average closed the month at 39,118.86, up 1.1% from 38,686.32, on May 31, 2024. It is up 3.8% year-to-date. The S&P 500 closed the month at 5,460.48, up 3.5% from 5,277.51 last month. It is up 14.5% year-to-date. The NASDAQ closed the month at 17,732.60, up 6% from 16,735.02 last month. It is up 18.1% year-to-date.

U.S. Treasury bond yields – The 10-year treasury bond closed the month yielding 4.36%, down from 4.51% last month. The 30-year treasury bond yield ended the month at 4.51%, down from 4.64% last month. We watch bond yields because mortgage rates often follow treasury 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 Surveyreported that mortgage rates for the most popular loan products as of June 27, 2024, were as follows: The 30-year fixed mortgage rate was 6.86%, down from 7.03% at the end of May. The 15-year fixed was 6.16%, down from 6.36% last month.

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.

Home sales data is released on the third week of the month for the previous month by the National Association of Realtors and the California Association of Realtors. These are May’s home sales figures.

U.S. existing-home sales – The National Association of Realtors reported that existing-home sales totaled 4.11 million units on a seasonally adjusted annualized rate in May, down 2.8% from an annualized rate of 4.23 million last May. The median price for a home in the U.S. in May was $419,300, up 5.8% from $396,500 one year ago. There was a 3.8-month supply of homes for sale in May, up from a 3.1-month supply one year ago. First-time buyers accounted for 32% of all sales. Investors and second-home purchasesaccounted for 16% of all sales. All-cash purchases accounted for 28% of all sales. Foreclosures and short sales accounted for 2% of all sales.

Year-over-year California home prices jumped 8.7% in May – The California Association of Realtors reported that existing-home sales totaled 277,410 on an annualized rate in May, down 6% from a revised 298,860 homes sold on an annualized basis last May. There was a 2.6-month supply of homes for sale, up from a 2.1-month supply one year ago. The statewide median price paid for a home in April was $908,040, up 8.7% from a revised median price of $835,280 one year ago.

The graph below shows sales data by county in Southern California.

Have a great weekend!

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 27, 2024, were as follows: The 30-year fixed mortgage rate was 6.86%, down from 6.87% last week. The 15-year fixed was 6.16%, up from 6.13% 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.

 

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Stock markets – The Dow Jones Industrial Average closed the week at 39,150.33, up down 1.5% from 38,586.16 last week. It is up 3.9% year-to-date. The S&P 500 closed the week at 5,464.62, up 0.6% from 5,431.16 last week. The S&P is up 14.6% year-to-date. The Nasdaq closed the week at 17,689.36 unchanged from 17,688.88 last week. It is up 17.8% year-to-date. U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 4.25%, up from 4.20% last week. The 30-year treasury bond yield ended the week at 4.39% up slightly from 4.34% 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 June 20, 2024, were as follows: The 30-year fixed mortgage rate was 6.87%, down from 6.95% last week. The 15-year fixed was 6.13%, down from 6.17% 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. Home sales data is released on the third week of the month for the previous month by the National Association of Realtors and the California Association of Realtors. These are May’s home sales figures. U.S. existing-home sales – The National Association of Realtors reported that existing-home sales totaled 4.11 million units on a seasonally adjusted annualized rate in May, down 2.8% from an annualized rate of 4.23 million last May. The median price for a home in the U.S. in May was $419,300, up 5.8% from $396,500 one year ago. There was a 3.8-month supply of homes for sale in May, up from a 3.1-month supply one year ago. First-time buyers accounted for 32% of all sales. Investors and second-home purchases accounted for 16% of all sales. All-cash purchases accounted for 28% of all sales. Foreclosures and short sales accounted for 2% of all sales. Year-over-year California home prices jumped 8.7% in May – The California Association of Realtors reported that existing-home sales totaled 277,410 on an annualized rate in May, down 6% from a revised 298,860 homes sold on an annualized basis last May. There was a 2.6-month supply of homes for sale, up from a 2.1-month supply one year ago. The statewide median price paid for a home in April was $908,040, up 8.7% from a revised median price of $835,280 one year ago. The graph below shows sales data by county in Southern California. Have a great weekend!

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 20, 2024, were as follows: The 30-year fixed mortgage rate was 6.87%, down from 6.95% last week. The 15-year fixed was 6.13%, down from 6.17% 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.

Economic news this week – Interest rates fell on tame inflation data – This week several reports suggested that inflation was cooling after picking up earlier in the year. On Wednesday the May Consumer Price Index (CPI) figures were released. Consumer prices increased 3.3% year-over-year in May, down from a 3.4% year-over-year increase in April. On a month-over-month basis, consumer prices held flat for the first time since July 2022. Core CPI, which excludes food and energy, increased 3.4% year-over-year, its smallest annual increase since April 2021. On Thursday, the Producer Price Index (PPI), a gauge of prices that producers get for their goods and services in the open market, was released. It showed that wholesale prices declined 0.2% month-over-month in May, following April’s surprise 0.5% increase. Year-over-year the PPI increased 2.2%. The core PPI increased 2.3% year-over-year. Economists had expected a 2.5% increase, so this was also good news. The graph below shows the trend of the CPI rate since 2021.

Stock markets – The Dow Jones Industrial Average closed the week at 38,589.16, down 0.8% from 38,898.99 last week. It is up 2.4% year-to-date. The S&P 500 closed the week at 5,431.16, up 1.6% from 5,346.99 last week. The S&P is up 13.9% year-to-date. The Nasdaq closed the week at 17,688.88, up 3.2% from 17,133.13 last week. It is up 17.8% year-to-date.

U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 4.20%, down from 4.43% last week. The 30-year treasury bond yield ended the week at 4.34%, down from 4.55% last week. We watch bond yields because mortgage rates follow bond yields. The 10-year was 4.28% on Thursday and shot up to 4.43% Friday after the hot jobs report was released.

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 13, 2024, were as follows: The 30-year fixed mortgage rate was 6.95%, down from 6.99% last week. The 15-year fixed was 6.17%, down from 6.29% 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.

May home sales figures will be released next week by the California Association of Realtors and the National Association of Realtors. You can get that data now for your county, city, or zip code at RodeoRE.com.

Happy Father’s Day to all Dads!

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 13, 2024, were as follows: The 30-year fixed mortgage rate was 6.95%, down from 6.99% last week. The 15-year fixed was 6.17%, down from 6.29% 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.

Economic news this week – This week it looked like interest rates were going to begin to fall. The 10-year bond yield and mortgage rates dropped every day. The 10-year fell to 4.28% from 4.51% last Friday, as it began to appear that the economy was finally slowing. Several key reports were released. The week started off with a report from the Labor Department showing that April Job openings, a measure of labor demand, were down to the lowest level since February 2021.  There were 1.24 openings for every person unemployed in April, down from 1.3 positions for every person unemployed in March, and the lowest since June 2021. Another report showed that manufacturing fell for a second consecutive month in May. Experts felt that manufacturing was struggling with higher interest rates and weaker consumer spending. Disposable personal income fell 0.1% in April, from the previous month. The personal savings rate was 3.6% in April and March, the lowest since December 2022. Also, the Q1 2024 GDP was revised downward from 1.6% to 1.4%, indicating that the economy was finally showing signs of slowing after one of the most aggressive campaigns of interest rate hikes and other tightening measures by the Fed in decades. Consumer spending reports showed that consumer spending finally showed signs of slowing, as retail sales decreased in March and April. Unfortunately, on Friday, a blockbuster May Jobs report was released showing that job growth and wages surged in May. Investors who were beginning to believe that the economy was finally slowing and inflation settling, were shocked by the surge in job growth and wages, and now feel that a rate drop by the Fed is months away. Bond yields and mortgage rates rose sharply on Friday after the jobs report was released. 

U.S. Job growth surged in May – The Department of Labor and Statistics reported that 272,000 new jobs added in May. That shocked experts who expected 165,000-180,000 new jobs. May marked the 41st consecutive month of job growth.  The unemployment rate rose to 4% in May, up from 3.9% in April, ending a 27 straight month streak with the unemployment rate below 4%. That has not happened since the 1960s. Had May’s unemployment remained below 4%, that would have marked the longest streak in history with unemployment under 4%.  After two years of high interest rates it was widely felt that job growth would finally be slowing, but May’s blowout jobs report shocked everyone. Average hourly wages increased 4.1% year-over-year in May, up from a  3.9% year-over-year increase in April.  The Fed is looking to get the unemployment rate up to the mid-4% range in order to slow wage growth to combat inflation. This report will give the Fed pause. At this point it is now if the Fed will bring interest rates down from a 24-year high but when they enter a new phase of rate drops. A blowout jobs report gives the Fed a reason to hold rates steady and not begin the phase of rate reductions yet.

Stock markets – The Dow Jones Industrial Average closed the week at 38,798.99, up 0.3% from 38,686.32 last week. It is up 2.9% year-to-date.  The S&P 500 closed the week at 5,346.99, up 1.3% from 5,277.51 last week.  The S&P is up 12.1% year-to-date. The Nasdaq closed the week at 17,133.13, up 2.4% from 16,735.02 last week. It is up 14.1% year-to-date.

U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 4.43%, down from 4.51% last week. The 30-year treasury bond yield ended the week at 4.55%, down from 4.65% last week. We watch bond yields because mortgage rates follow bond yields. The 10-year was 4.28% on Thursday and shot up to 4.43% Friday after the hot jobs report was released.

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 6, 2024, were as follows: The 30-year fixed mortgage rate was 6.99%, down from 7.03% last week. The 15-year fixed was 6.29%, down from 6.36% last week. Rates rose after the jobs report was released 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.

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 6, 2024, were as follows: The 30-year fixed mortgage rate was 6.99%, down from 7.03% last week. The 15-year fixed was 6.29%, down from 6.36% 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.

It was a tough week for stock markets and interest rates. Stock markets dropped steadily all week before rebounding on Friday, but still ended the week lower. Bond yields and mortgage rates also rose this week on fears that inflation was not dropping as quickly as hoped.  Comments from the Federal Reserve which included the release of their “ Beige Book” that stated that stubborn inflation will keep rates higher for longer than expected earlier in the year was not well received by investors as stocks sold off. One Fed official even stated that there was a possibility of a rate increase if inflation continued to pick up. On Friday the Personal Consumption Index (PCE) was released. It showed that personal-consumption expenditures rose by 2.7% year-over-year in April. That was in line with expectations and indicated that inflation was slowing down and stock markets recovered from some of their steep losses in the final 10 days of the month.Bond yields and mortgage rates dropped slightly. All eyes are on the job market. The May jobs report will be released next Friday. The hope is that hiring continued to slow in May from its torrid pace in March. New unemployment claims remain low and it is feared that the unemployment rate will remain below 4% for a 28^thconsecutive month setting a new record for the country. Such a low unemployment rate is considered a major contributor to inflation by the Federal Reserve, as people with jobs and no fear of losing their job spend more freely which causes price increases. Next Friday we will get the May jobs numbers. That will be an indicator of whether the economy is finally beginning to slow.

 Stock markets – The Dow Jones Industrial Average closed the week at 38,686.32, down 1% from 39,069.59 last week. It is up 2.4% year-to-date.  The S&P 500 closed the week at 5,277.51, down 0.6% from 5,304.72 last week.  The S&P is up 10.7% year-to-date. The Nasdaq closed the week at 16,735.02, down 1.1% from 16,920.80 last week. It is up 11.5% year-to-date.

 U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 4.46%, up from 4.46% last week. The 30-year treasury bond yield ended the week at 4.57, almost unchanged from 4.57% 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 30, 2024, were as follows: The 30-year fixed mortgage rate was 7.03%, up from 6.94% last week. The 15-year fixed was 6.36%, up from 6.24% 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.