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Economic Update | Week Ending May 4, 2024
| Economic news this week – May started out with stocks falling and interest rates jumping to their highest levels since last October because inflation has increased since the start of the year. Some experts, who began the year expecting four interest rate drops, were now talking about a possible Fed rate increase, but on Wednesday, Federal Reserve Chairman, Jarome Powell put investors’ fears of a rate increase to rest by saying that the Fed had no intention of raising rates and would leave rates unchanged at this time. He also said that the Fed would not continue to reduce its balance sheet aggressively and would stall the sale of its bond portfolio. The Fed has reduced its balance sheet from about $9 trillion in 2022 to $7.5 trillion. By stopping the sale of their U.S. treasury bond portfolio, fewer bonds will be sold, which should push bond prices higher. Since yields move down when bond prices move up, this is the first step in lowering long-term rates for the Fed. On Friday, the April jobs report was released. It showed that job growth slowed in April, wage growth moderated, and the unemployment rate increased slightly. These are all data points that the Fed is looking at before they begin to drop their key short-term interest rates from their current 25-year highs.
U.S. Job growth slowed in April – The Department of Labor and Statistics reported that 175,000 new jobs were added in April, down from 303,000 new jobs added in March. That marked the 40th consecutive month of job growth. The unemployment rate rose to 3.9% in April, up from 3.8% in March. April was the 27 straight month with the unemployment rate below 4%. That has not happened since the 1960s. The Fed is looking to get the unemployment rate up to the mid-4% range in order to slow wage growth to combat inflation. After two years of high-interest rates, this was the first sign that job growth may finally be slowing. Average hourly wages increased 3.9% year-over-year, their lowest year-over-year increase in two years. Stock markets – The Dow Jones Industrial Average closed the week at 38,675.68, up 1.1% from 38,239.66 last week. It is up 2.6% year-to-date. The S&P 500 closed the week at 5,127.79, up 0.5% from 5,099.96 last week. The S&P is up 7.5% year-to-date. The Nasdaq closed the week at 16,156.33, up 1.4% from 15,927.90 last week. It is up 7.6% year-to-date. U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 4.50%, down from 4.68% last week. The 30-year treasury bond yield ended the week at 4.66%, down from 4.78% 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 2nd, 2024, were as follows: The 30-year fixed mortgage rate was 7.22%, up from 7.17% last week. The 15-year fixed was 6.47%, up from 6.44% last week. Rates were lower on Friday after the Jobs report. Next week’s rates will be lower. 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 not be released by the California Association of Realtors and the National Association of Realtors for another two weeks. We will have that data available next Wednesday. You can get April’s results for your city, zip code, or county on our website RodeoRe.com. Have a great weekend! |
Mortgage Rate Update | May 2, 2024
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 2nd, 2024, were as follows: The 30-year fixed mortgage rate was 7.22%, up from 7.17% last week. The 15-year fixed was 6.47%, up from 6.44% 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 Update | Month Ending April 30, 2024
| Interest rates rose to their highest levels since last November in April because inflation readings have risen since the beginning of the year. April key economic news included: Employers added 303,000 new jobs in March, well above the 200,000 economists expected. The Consumer Price Index (CPI) in March showed that consumer prices rose 3.5% year-over-year, up from 3.2% in February and 3.1% in January. Core Personal Consumption Expenditures index (PCE) grew by 3.7% in the first quarter of 2024 compared to the first quarter of 2023, yet Core PCE was just 2.7% higher in March compared to last March. Retail sales also came in much higher than expected. In negative economic news, the initial estimate for the first quarter of U.S. GDP showed that the economy grew at just a 1.6% pace, its slowest growth in two years and significantly off economists’ expectations of a 2.5% increase. With inflation heating back up and new jobs created at almost double the number expected, hopes of a Fed rate reduction soon have all but ended.
Stock Markets – The Dow Jones Industrial Average closed the month at 37,815.92 down 5% from 39,807.37 on March 31, 2023. It is up 0.3% year-to-date. The S&P 500 closed the month at 5,035.69, down 4.2% from 5,254.35 last month. It is up 5.6% year-to-date. The NASDAQ closed the month at 15,657.82, down 4.4% from 16,379.46 last month. It is up 4.4% year-to-date. U.S. Treasury bond yields – The 10-year treasury bond closed the month yielding 4.69%, up from 4.20% last month. The 30-year treasury bond yield ended the month at 4.79%, up from 4.35% 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 Survey reported that mortgage rates for the most popular loan products as of April 25, 2024, were as follows: The 30-year fixed mortgage rate was 7.17%, up from 6.79% at the end of March. The 15-year fixed was 6.44%, up from 6.11% 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 March’s home sales figures. U.S. existing-home sales – The National Association of Realtors reported that existing-home sales totaled 4.19 million units on a seasonally adjusted annualized rate in March, down 3.7% from an annualized rate of 4.35 million in March 2023. The median price for a home in the U.S. in March was, up 5.7% from last March. There was a 3.2-month supply of homes for sale in March, up from a 2.7-month supply one year ago. First-time buyers accounted for 32% of all sales. Investors and second-home purchases accounted for 15% 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 almost 8% in March. – The California Association of Realtors reported that existing home sales totaled 267,470 in March, down 7.8% from 290,470 closed sales in February, and down 4.4% from a revised 279,700 homes sold on an annualized basis last March. There was a 2.6-month supply of homes on the market in March, down from a 3-month month supply of homes in February and down from a 2.1-month supply one year ago. The statewide median price paid for a home in March was $854,490 up 7.9% from a revised median price of $793,260 last March. The graph below shows home sales figures by county in Southern California.
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Economic Update | Week Ending April 27, 2024
| Interest rate concerns continued to lead markets this week, as has been the case since 2022. With inflation rising since the beginning of the year, hopes of a Fed rate reduction soon have all but ended. This week various Fed members have made comments that have investors wondering if there will be any interest rate reductions this year. On Thursday the initial estimate of the first quarter of U.S. GDP showed that the economy grew at just a 1.6% pace, its slowest pace of growth in two years and well-off economists’ expectations of a 2.5% increase. In a bad news is good news for interest rates environment, slower growth would have been good news, except that the report also included that the “core” Personal Consumption Expenditures index (PCE) grew by 3.7% in the first quarter. Economists had expected a 3.4% gain, and the core PCE growth rate was just 2% in the previous quarter. It appeared that inflation had picked up dramatically in the quarter. Fortunately, on Friday the core Personal Consumption Expenditure index for March was released. It showed that consumer prices rose 2.7% year-over-year in March, up from February’s 2.5% rise, but a welcome relief for investors who one day earlier were informed that the same index rose 3.7% in the first quarter of 2024. Treasury bond yields settled down a little and stocks rebounded on Friday to close the week higher.
Stock markets – The Dow Jones Industrial Average closed the week at 38,239.66, up 0.7% from 37,986.49 last week. It is up 1.5% year-to-date. The S&P 500 closed the week at 5,099.96, up 2.7% from 4,967.23 last week. The S&P is up 6.9% year-to-date. The Nasdaq closed the week at 15,927.90, up 4.2% from 15,281.01 last week. It is up 6.1% year-to-date. U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 4.68% up from 4.62% last week. The 30-year treasury bond yield ended the week at 4.78%, up from 4.72% 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 April 25, 2024, were as follows: The 30-year fixed mortgage rate was 7.17%, up from 7.10% last week. The 15-year fixed was 6.44%, up from 6.39% 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 supporting homeownership and rental housing. Their mandate is to provide liquidity, stability, and affordability to the U.S. U.S. existing-home sales – The National Association of Realtors reported that existing-home sales totaled 4.19 million units on a seasonally adjusted annualized rate in March, down 3.7% from an annualized rate of 4.35 million in March 2023. The median price for a home in the U.S. in March was, up 5.7% from last March. There was a 3.2-month supply of homes for sale in March, up from a 2.7-month supply one year ago. First-time buyers accounted for 32% of all sales. Investors and second-home purchases accounted for 15% of all sales. All-cash purchases accounted for 28% of all sales. Foreclosures and short sales accounted for 2% of all sales this week. Have a great weekend! |
Mortgage Rate Update | April 25, 2024
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 April 25, 2024, were as follows: The 30-year fixed mortgage rate was 7.17%, up from 7.10% last week. The 15-year fixed was 6.44%, up from 6.39% 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.
Rodeo Realty Welcomes!
Explore our website for the most up-to-date information on real estate data and local news!
Economic Update | Week Ending April 20, 2024
| This week stocks fell and interest rates rose to their highest levels since last November. Rates have increased steadily since the beginning of the year as economic data has shown that the economy is heating up and inflation has begun to rise since the start of the year. This week retail sales for March were announced. Consumers spent well over what experts had anticipated, another sign of the economy heating up. Several Fed members spoke this week. Investors now fear that it’s possible that there may be no rate cuts this year. In January experts expected four cuts in 2024. Oil prices dropped from last week’s highs as it appears that tensions between Israel and Iran are not going to spread into a larger conflict.
Stock markets – The Dow Jones Industrial Average closed the week at 37,986.49, unchanged from 37,983.24 last week. It is up 0.8% year-to-date. The S&P 500 closed the week at 4,967.23, down 3.1% from 5,123.41 last week. The S&P is up 4.2% year-to-date. The Nasdaq closed the week at 15,281.01, down 3.5% from 16,175.09 last week. It is up 1.8% year-to-date. U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 4.62% up from 4.50% last week. The 30-year treasury bond yield ended the week at 4.72%, up from 4.61% 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 April 18, 2024, were as follows: The 30-year fixed mortgage rate was 7.1%, up from 6.88% last week. The 15-year fixed was 6.39%, up from 6.16% 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. Year-over-year home prices jumped almost 8% in March. – The California Association of Realtors reported that existing home sales totaled 267,470 in March, down 7.8% from 290,470 closed sales in February, and down 4.4% from a revised 279,700 homes sold on an annualized basis last March. There was a 2.6-month supply of homes on the market in March, down from a 3-month month supply of homes in February and up from a 2.1-month supply one year ago. T he statewide median price paid for a home in March was $854,490 up 7.9% from a revised median price of $793,260 last March. Have a great weekend! |
Mortgage Rate Update | April 18, 2024
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 April 18, 2024, were as follows: The 30-year fixed mortgage rate was 7.1%, up from 6.88% last week. The 15-year fixed was 6.39%, up from 6.16% 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 Update | Week Ending April 13, 2024
| It was another tough week for stocks and interest rates. The March Consumer Price Index was released on Wednesday. It showed that consumer prices rose 3.5% year-over-year, up from 3.2% year-over-year in February, and 3.1% in January. Inflation was trending down at the end of 2023 but has begun to trend higher. That added fuel to last week’s jobs report which showed that the country added almost double the number of jobs that analysts expected in March and the unemployment rate dipped again, leading investors to feel that the economy was heating up. More people working leads to higher consumer confidence and more people spending, which fuels inflation. Mortgage interest rates and bond yields have risen steadily to their highest levels since November after beginning the year at their lowest levels. Oil prices rose as well over the past two weeks. Experts fear that a conflict between Israel and Iran could cause oil prices to rise another 20%.
Stock markets – The Dow Jones Industrial Average closed the week at 37,983.24, down 2.4% from 38,904.04 last week. It is up 0.8% year-to-date. The S&P 500 closed the week at 5,123.41, down 1.6% from 5,204.34 last week. The S&P is up 7.4% year-to-date. The Nasdaq closed the week at 16,175.09, down 0.4% from 16,248.52 last week. It is up 7.8% year-to-date. U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 4.50%, up from 4.39% last week. The 30-year treasury bond yield ended the week at 4.61%, up from 4.54% 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 April 11, 2024, were as follows: The 30-year fixed mortgage rate was 6.88%, up from 6.82% last week. The 15-year fixed was 6.16%, up from 6.06% 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 for March will be released next week by the National Association of Realtors and the California Association of Realtors. We have that data tabulated now and you can view that data for your city or zip code at RodeoRe.com. Have a great weekend! |
