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Stock markets dropped for a fourth straight week – Stock markets dropped further this week as fears of higher interest rates due to high inflation sent stocks lower. Comments by Fed Chairman, Jarome Powel on Thursday which included “taming inflation is absolutely essential” led investors to believe that an interest rate hike of at least ½% would be announced at the May 3-4 Fed meeting. Those comments caused the Dow, which was up for the week on Wednesday, to fall almost 1,000 points on Thursday. The Dow Jones Industrial Average closed the week at 33,811.40, down 1.9% from 34,451.23 last week. Its down 7.0% year-to-date. The S&P 500 closed the week at 4,271.78, down 2.8% from 4,392.28 last week. The S&P is down 19.4% year-to-date. The NASDAQ closed the week at 12,839.29, down 3.8% from 13,351.08 last week. It is down 18.0%, year-to-date. 

U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 2.90%, up from 2.83% last week. The 30-year treasury bond yield ended the week at 2.95%, up from 2.92% last week. We watch bond yields because mortgage rates often follow treasury bond yields. 

Mortgage rates – Home mortgage rates have continued to increase. Freddie Mac Primary Mortgage Survey reported that mortgage rates as of April 21, 2022 for the most popular loan products were as follows: The 30-year fixed mortgage rate was 5.11%, up from 5.00% last week. The 15-year fixed was 4.38% up from 4.17% last week. The 5-year ARM was 3.75%, up from 3.69% last week. 

March 2022 home sales – Home sales figures are released in the third week of the month for the previous month.

U.S. existing-home sales – The National Association of Realtors reported that existing-home sales totaled 5.77 million on a seasonally adjusted annualized rate in March, down 2.7% month-over-month from the annualized rate of sales in February. Year-over-year sales were down 4.5% from the annualized rate of 6.04 million in March 2021. The median price of a home in the U.S. in March was $375,300, up 15.0% from $326,300 one year ago. March marked a record 121 consecutive months of year-over-year increases in the median price. Inventory levels remained near record lows. There was just a 2-month supply of homes for sale in March, down from a 2.1 month supply one year ago. First-time buyers accounted for 30% of all sales. Investors and second-home purchases accounted for 18% of all sales. All-cash purchases accounted for 28% of all sales. Foreclosure and short-sales accounted for less than 1% of all sales remaining at a historic low. 

California existing-home sales –  The California Association of Realtors reported that existing-home sales totaled 426,970 on a seasonally adjusted annualized rate in March. That marked a 4.4% year-over-year drop from the number of homes sold in March 2021. Existing-home sales in the first quarter of 2022 are down 7.0% from the number of homes sold in the first quarter of 2021, which pretty closely matches the drop in the number of new listings. The median price paid for a home in March was $849,080, up 10.1% from February’s median price of $771,270. Year-over-year prices are up 11.9%. There was a 1.7-month supply of homes for sale in March, down form a 2-month supply of homes for sale in February, and unchanged from a 1.7-month supply of homes in March 2021. 

The graph below shows regional figures by county in Southern California.

Stock markets dropped this week following a high inflation report – Stock markets were on track for a relatively good week as more companies reported strong corporate profits. Unfortunately, on Thursday the January inflation report was released. The January CPI (Consumer Price Index), which represents the broadest measure of inflation, showed that consumer prices rose 7.5% from January 2021, a 40-year high. Bond yields and mortgage rates immediately began to rise and stocks fell on the news. It is widely felt that the Federal Reserve could make a 1/2% rise to their key interest rates in the coming weeks, and at least two more increases this year in order to slow the pace of inflation. The Dow Jones Industrial Average closed the week at 34,738.06, down 1.0% from 35,087.74 last week. It is down 4.4% year to date. The S&P 500 closed the week at 4,418.64, down 7.3% from 4,500.94 last week. The S&P is down 5.6% year to date. The NASDAQ closed the week at 13,751.19, down 2.5% from 14,098.01 last week. It is down 12.1% year to date.

U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 1.93%, unchanged from 1.92% last week. The 30-year treasury bond yield ended the week at 2.24%, unchanged from 2.23% last week. We watch bond yields because mortgage rates often follow treasury bond yields.

Mortgage rates – The February 10, 2022, Freddie Mac Primary Mortgage Survey reported that mortgage rates for the most popular loan products were as follows: The 30-year fixed mortgage rate was 3.69%, up from 3.55% last week. The 15-year fixed was 2.93%, up from 2.77% last week. The 5-year ARM was 2.80%, up from 2.71% last week.

California housing affordability improved in the fourth quarter of 2021 – The California Association of Realtors published their third-quarter housing affordability report this week. They found that 25% of California households could afford to purchase an $797,470 median-priced home. That is up from 24% in the third quarter of 2021, but down from 27% in the fourth quarter of 2020. A minimum income of $148,000 was needed to qualify for the monthly payment of $3,700 which included principal, interest, and taxes on a 30-year fixed-rate mortgage at a 3.28% rate. Condominiums were more affordable. The report found that 36% of California households were able to afford a $610,350 median-priced condo or townhouse. A minimum annual income of $113,200 was needed to qualify for the monthly payment of $2,830.

January home sales numbers from the California Association of Realtors and the National Association of Realtors will be released next week. You can find January statistics now on my website. Just look for market trends and enter your city or zip code!

Economic Update For The Week Ending December 11, 2021

 Stock markets recovered this week – News that the Omicron COVID variant is causing more mild symptoms than previous variants has helped stocks recover some of their steep loses suffered after the variant was first discovered. The November CPI, a key index of inflation, showed that consumer prices were up 6.8% year over year, their highest increase in 39 years.  The Dow Jones Industrial Average closed the week at 34,970.99, up 1.3% from 34,508.08 last week. It is up 14.3% year-to-date.  The S&P 500 closed the week at 4,712.02, up 3.8% from 4,538.43 last week. It is up 24.6% year-to-date. The NASDAQ closed the week at 15,630.60, up 3.6% from 15,085.47 last week. It is up 20.7% year-to-date.

U.S. Treasury bond yields  – The 10-year treasury bond closed the week yielding 1.48% up from 1.35% last week. The 30-year treasury bond yield ended the week at 1.86%, up from 1.69% last week. Bond yields dropped sharply on fears of the new Omicron variant. They have risen from those steep drops but are still lower than they were two weeks ago. We watch bond yields because mortgage rates often follow treasury bond yields.

Mortgage rates – The December 9, 2021, Freddie Mac Primary Mortgage Survey reported mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate was 3.10%, unchanged from 3.11% last week. The 15-year fixed was 2.38% unchanged from 2.39% last week. The 5-year ARM was 2.45%, almost unchanged from 2.49% last week.

The November home sales reports will be released by the California Association of Realtors and the National Association of Realtors next week. Rodeo Realty has its reports up on the ninth of each month. You can get a November home sales report now for your city or zip code by visiting RodeoRe.com.

Stock markets closed the week at record highs – Stocks rebounded in October as investors were encouraged by a number of factors. Among the most notable was a drop in COVID-19 cases across the country, third quarter corporate profits mostly exceeding expectations, and a proposed increase of the corporate tax rate was removed from the latest spending plan. The Dow Jones Industrial Average closed the week at 35,819.56, up 0.4% from 35,677.02 last week. It is up 16.9% year-to-date. The S&P 500 closed the week at 4,605.38, up 1.3% from 4,544.71, last week. It is up 22.7% year-to-date. The NASDAQ closed the week at 15,498.39, up 2.7% from 15,090.20 last week. It is up 20.3% year-to-date.

U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 1.55%, down from 1.66% last week. The 30-year treasury bond yield ended the week at 1.93%, down from 2.08% last week. We watch bond yields because mortgage rates often follow treasury bond yields.

Mortgage rates – The October 28, 2021, Freddie Mac Primary Mortgage Survey reported mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate was 3.14%, up from 3.09% last week. The 15-year fixed was 2.37%, up slightly from 2.33% last week. The 5-year ARM was 2.56%, almost unchanged from 2.54% last week. Rates dropped at the end of the week. The 30-year was close to 3% on Friday.

The October jobs report will be released next Friday. It is widely felt that job gains will rebound from their disappointing levels in August and September. Those numbers will be included in next week’s update.

Stock markets rise again this week  – Stock markets, after dropping about 5% in September, have rebounded in October. Economic data points to the economy continuing its expansion. Early reporting of corporate earnings have shown strong corporate profits. Retail sales, which seemed to stall in July August, were up over 14% year-over-year in September. The Dow Jones Industrial Average closed the week at 35,294.76, up 1.6% from 34,746.25 last week. It is up 15.4% year-to-date.  The S&P 500 closed the week at 4,471.37, up 1.8% from 4,391.34 last week. It is up 18.9% year-to-date. The NASDAQ closed the week at 14,897.34, up 2.2% from 14,579.54 last week. It is up 15.5% year-to-date.

U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 1.59%, down from 1.61% last week. The 30-year treasury bond yield ended the week at 2.05%, down from 2.16% last week. We watch bond yields because mortgage rates often follow treasury bond yields.

Mortgage rates – The October 14, 2021, Freddie Mac Primary Mortgage Survey reported mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate was 3.05%, up from 2,99% last week. The 15-year fixed was 2.30%, up from 2.23% last week. The 5-year ARM was 2.55% up slightly from 2.52% last week.

2022 housing forecast – The California Association of Realtors released its 2022 housing market forecast this week. They expect the number of homes sold in 2022 to be decline by about 5.2% to 416,800 units. They have projected 439,800 sales in 2021. 2022’s projection of 419,800 sales, while less than 2021, would be the second highest number of sales in the last five years. They expect the median price to rise 5.2% to $834,400 in 2022. While still a healthy increase it’s a ways off from the projected historic 20.3% increase in the median price in 2021. They forecast interest rates on 30-year fixed mortgages to be at or above 3.5%. While about 1/2% higher than rates are today, that’s a very low interest rate and still near historic lows.

2022 CALIFORNIA HOUSING FORECAST

	2015	2016	2017	2018	2019	2020	2021p	2022f
SFH Resales (000s)	409.4	417.7	424.9	402.6	398.0	411.9	439.8	416.8
% Change	7.00%	2.00%	1.70%	-5.20%	-1.20%	3.50%	6.80%	-5.20%
Median Price ($000s)	$476.3	$502.3	$537.9	$569.5	$592.4	$659.4	$793.1	$834.4
% Change	6.60%	5.40%	7.10%	5.90%	4.00%	11.30%	20.30%	5.20%
Housing Affordability Index*	31%	31%	29%	28%	31%	32%	26%	23%
30-Yr FRM	3.90%	3.60%	4.00%	4.50%	3.90%	3.10%	3.00%	3.50%

September California and U.S. home sales figures will be released by the California Association of Realtors, and the National Association of Realtors next week.

If you’re playing with the idea of placing your property on the market, you may also be wondering how you can make your home more appealing. Luckily, multiple wall panel ideas can help.

Not only can you use wall panels as focal points in a room, but you can also cost-effectively install them. By doing so, you will enhance the visual appeal of your home and improve its value.

Beadboard Wall panels

When you use wall panels, it is good to cover only one wall or part of a wall in the room. This approach provides extra character without being visually overwhelming. In addition, beaded boards are one way to add interest to a room.

Beaded boards are narrow wood strips with a thin ridge on each vertical side, known as the bead. You can even use this product to wainscot a room, which is the traditional covering about two feet of the wall from the bottom upwards.

Reclaimed wood wall paneling

Reclaimed wood is an attractive option to upscale the texture in a room. The character of the wood, such as the knots, lines, and scuff marks, all increase the wood texture. This varied texture makes reclaimed wood paneling ideal for horizontal ship lapping in awkward areas, using different panel widths.

Raised Trim Wall Panel

Consider using trim with beveling to raise interior design appeal. The panel can either be in large or small squares or another shape. Paneling also comes with diverse trimming options, providing you with various shapes and styles.

Paint the trim work the same color as the other walls or in a subtle or contrasting color. Adding trim work creates a modern look that improves your home’s value.

Board and Batten Wall Panel

Wood contains a warmth that you can use to your advantage in the home. For example, creating horizontal, vertical, or other paneling patterns on one bedroom wall draws attention.

In essence, the board and batten style of placing larger wood strips over flat boards is a contemporary interior decorating technique that works. It augments the eye-catching appeal in a room, increasing the comfort and pleasure of spending time in that space.

Contrasting beadboard Wall Panels

Small spaces like bathrooms can benefit from beaded-board panels. Use this wall panel idea to wainscot your bathroom. The combination of cold ceramic tiles on the top half of the wall and warm beaded board in a different color on the bottom half creates a stunning contrast which helps lift the room.

Also, think about the style and pattern of the beaded boards when using this wall panel idea. A narrower beaded board is also typically more suitable for small spaces like bathrooms, for example.

Wood and mirrors

Instead of using wood panels in isolation and their natural form, why not switch up the creativity. As a wall panel idea, mixing mirrors with dividing panels is simple. Divide a wall with painted wooden boards that have mirror inserts in each gap. This wall panel idea provides the illusion of space, reflects the interior décor in the area, and ensures a room-lift that sells homes quickly.