The economy – February marked some data driven changes in investor and consumer confidence. Since the election stock markets have risen steadily as investors felt that lower tax rates and less regulation would boost the economy and increase corporate profits. The economy has picked up. Stock markets reached historic highs, consumer confidence jumped, job creation has surged, and inflation picked up. For whatever reason, the economy has begun to show signs of slowing down in the last two weeks. On February 14 the January retail sales report was released. Retail sales dropped unexpectedly in January. On January 21, the most recent consumer confidence report showed that consumer confidence dropped significantly. On February 27 new unemployment claims jumped. Stock markets that reached historic highs in January have dropped sharply over the last two weeks and mortgage and bond rates have dropped as well.
Inflation – In August and September 2024 it appeared that the economy was slowing, and that inflation had come under control. The Consumer Price Index (CPI) had steadily worked its way down from its peak of 9.1% in June of 2022 to 2.4% in September 2024. It appeared that the Fed’s campaign to curb inflation had worked. Unfortunately, since the election the economy has picked up and the CPI rate has worked its way up. The latest reading showed that consumer prices were 3% higher in January than they were one year earlier. The Producer Price Index (PPI) has also increased. It measures wholesale prices that are often passed along to consumers. The latest PPI reading showed a 3.5% year-over-year increase. Its highest rate on 18 months. On Friday, February 28, 2025, the government released the Personal Expenditure Index (PPE), the Fed’s preferred measure of inflation. It showed that personal expenditures rose 2.5% year-over-year in January, down from 2.6% in December. That was another surprise. Experts excepted an increase after the CPI, and PPI had jumped. The graph below shows the CPI rate since 2021 Jobs – In 2023 and early 2024 the unemployment rate had ticked along at about 2.6%, its lowest rate since the 1960’s. There were many more jobs available than workers looking for jobs. This created a shortage of workers and wages were rising faster than the Fed was comfortable with. More people working and higher wages increase consumer spending which puts upward pressure on inflation. By August the unemployment rate had jumped to 4.2%. That is still considered full employment, but the shortage of workers had begun to level out. Wages had moderated and were rising at a healthy level. In recent months, the unemployment rate has begun to drop. It’s now at 4% and the shortage of workers has driven wages to their highest annual increases since early last year. Mortgage Interest rates and Bond yields – In September the 30-year mortgage rate had worked its way down to 6% from nearly 8% at their 2023 peak. We were even seeing days with rate locks under 6%. As described above the economy, stock market and jobs market picked up. The 30-year fixed rate was up to 7% in mid-February. It has dropped to 6.6% in the last ten days as signs of slowing in the economy have begun. The 10-year U.S. Treasury Bond Yield had dropped to 3.6% in September 2024 from 5% one year earlier. As the economy heated back up it increased. It was 4.75% in January but has worked its way back to 4.25% in the past few days. Stock markets – The Dow Jones Industrial Average ended the year at 43,840.91, down 1.6% from 44,544.66 on January 31, 2025. The Dow is up 3% year-to-date. The S&P 500 closed the year at 5,954.50, down 1.4% from 6,040.53 on January 31, 2025. It is up 1.3% year-to-date. The NASDAQ closed at 18,847.28, down 4% from 19,627.44 on January 31, 2025. It is down 2.4% year-to-date. U.S. Treasury Bond Yields increased in 2024 – The 10-year U.S. treasury bond yield closed the year at 4.24%, down from 4.58% On December 31, 2024. The 30-year treasury yield ended the year at 4.51%, down from 4.83% on January 31, 2025. 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 January 30, 2025, were as follows: The 30-year fixed mortgage rate was 6.76%, down from 6.95% last month. The 15-year fixed was 5.94%, down from 6.12% last month. The graph below shows the trajectory of mortgage rates over the past year Home sales data is released on the third week of the month for the previous month by the California Association of Realtors and the National Association of Realtors. These are January’s home sales figures. U.S. existing-home sales January 2025 – The National Association of Realtors reported that existing-home sales totaled 4.08-million units on a seasonal annualized rate in January, up 2% from an annualized rate of 4-million units last January. The median price for a home sold in the U.S. in January was $396,900, up 4.8% from $378,600 one year ago. There was a 3.5-month supply of homes for sale in January, up from a 3-month supply one year ago. First-time buyers accounted for 28% of all sales. Investors and second-home purchases accounted for 17% of all sales. All cash purchases accounted for 29% of all sales. Foreclosures and short sales accounted for 3% of all sales. California existing-home sales – The California Association of Realtors reported that existing-home sales totaled 254,110 on an annualized basis in January, down 1.9% from a revised 259,160 homes sold on an annualized basis last January. The statewide median price paid for a home was $838,850 in January, up 6.3% from $789,480 one year ago. There was a 4.1-month supply of homes for sale in January, up significantly from a 2.7-month supply of homes for sale in December and up from a 3.2-month supply in January 2024. The graph below lists home sales data by county in Southern California |
Economic Update | Week Ending March 1, 2025
Reports released this week showed that jobless claims had picked up. This points to confirm other reports like a sudden drop in retail sales and consumer confidence that suggest the economy is slowing. On Friday, experts were surprised to learn that the Personal Consumption Expenditure Index (PCE) in January showed just a 2.5% annual increase, down from a 2.6% annual increase in December. That marked the first inflation report in several months that did not show inflation increasing. Mortgage rates and bond yields have dropped in the last two weeks.
Stock markets – The Dow Jones Industrial Average closed the week at 43,840.91, up 1% from 43,428.02 last week. It is up 3% year-to-date. The S&P 500 closed the week at 5,954.50, down 1% from 6,013.13 last week. The S&P is up 1.3% year-to-date. The Nasdaq closed the week at 18,847.28, down 3.5% from 19,524.01 last week. It is down 2.4% year-to-date. U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 4.24%, down from 4.42% last week. The 30-year treasury bond yield ended the week at 4.51%, down from 4.67% 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 February 27, 2025, were as follows: The 30-year fixed mortgage rate was 6.76%, down from 6.85% last week. The 15-year fixed was 5.94%, down from 6.04% 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. Have a Great Weekend! |
Mortgage Rate Update | February 27, 2025
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 February 27, 2025, were as follows:
The 30-year fixed mortgage rate was 6.76%, down from 6.85% last week. The 15-year fixed was 5.94%, down from 6.04% 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 February 22, 2025
Stock markets sold off on Friday as new data suggested that the economy was slowing, while inflation was rising. A slowing economy causes inflation to drop, but that has not been the case according to recent data. In the late 1970’s economists had to come up with the term stagflation because the economy was stagnant, and inflation was rising. That’s something that had never happened before. Investors fear that we may be heading into a period like that, but it’s too early to tell. The University of Michigan consumer sentiment index fell to 64.7 in February, a decline of almost 10%. This shocked experts and stock markets dropped sharply with the Dow dropping 700 points, its worst day of 2025. Last Friday it was reported that retail sales unexpectedly fell in January, and retail stocks dropped this week as Walmart forecasted that future sales would be weaker than expected. Often inflation data runs a couple of months behind economic data. The economy has been very strong until these recent reports. Stock markets have increased sharply since the election last November as investors expect lower tax rates and less regulation. Tariffs are another concern, but it is quite probable that if the economy does cool consumers will stop spending and inflation rates will drop. Thinking otherwise is very premature.
Stock markets – The Dow Jones Industrial Average closed the week at 43,428.02, down 2.5% from 44,546.08 last week. It is up 2.1% year-to-date. The S&P 500 closed the week at 6,013.13, down 1.7% from 6,114.63 last week. The S&P is up 2.2% year-to-date. The Nasdaq closed the week at 19,524.01, down 2.5% from 20,026.77 last week. It is up 1.1% year-to-date. U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 4.42%, down from 4.47% last week. The 30-year treasury bond yield ended the week at 4.67%, down slightly from 4.69% 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 February 20, 2025, were as follows: The 30-year fixed mortgage rate was 6.85%, down slightly from 6.87% last week. The 15-year fixed was 6.04%, down slightly from 6.09% last week. The graph below shows the trajectory of mortgage rates over the past year Home sales data is released on the third week of the month for the previous month by the California Association of Realtors and the National Association of Realtors. These are January’s home sales figures. U.S. existing-home sales January 2025 – The National Association of Realtors reported that existing-home sales totaled 4.08 million units on a seasonally annualized rate in January, up 2% from an annualized rate of 4 million units last January. The median price for a home sold in the U.S. in January was $396,900, up 4.8% from $378,600 one year ago. There was a 3.5-month supply of homes for sale in January, up from a 3-month supply one year ago. First-time buyers accounted for 28 % of all sales. Investors and second-home purchases accounted for 17% of all sales. All cash purchases accounted for 29% of all sales. Foreclosures and short sales accounted for 3% of all sales. California existing-home sales – The California Association of Realtors reported that existing-home sales totaled 254,110 on an annualized basis in January, down 1.9% from a revised 259,160 homes sold on an annualized basis last January. The statewide median price paid for a home in was $838,850 in January, up 6.3% from $789,480 one year ago. There was a 4.1-month supply of homes for sale in January, up significantly from a 2.7-month supply of homes for sale in December and up from a 3.2-month supply in January 2024. The graph below lists home sales data by county in Southern California Have a Great Weekend! |
Mortgage Rate Update | February 20, 2025
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 February 20, 2025, were as follows:
The 30-year fixed mortgage rate was 6.85%, down from 6.87% last week. The 15-year fixed was 6.04%, down from 6.09% 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 February 15, 2025
Inflation increased in January – The January Consumer Price Index (CPI) was released on Wednesday. It showed that consumer inflation increased 0.5% month-over-month. That marked the largest month-over-month increase since August 2023. The CPI index showed consumer prices were up 3% year-over-year. The CPI index peaked at 9.1% in May 2022 and worked its way down to 2.4% in August 2024, unfortunately, its risen every month since then and is now back up to 3%, a one-year high. Core CPI, which excludes volatile food and energy prices increased 0.4% month-over-month in January, its highest monthly increase since April 2023. It is currently up 3.3% year-over-year. On Thursday it was reported that the Producer Price Index (PPI) jumped 3.5% year-over-year in January, its highest increase since February 2023. Producer prices are wholesale prices. When producers have to pay more for goods and materials those increases are passed along to consumer prices. Bond yields and mortgage rates rose on Wednesday and Thursday following the inflation news.
Retail sales slumped in January – On Friday the Commerce Department reported that retail sales slipped 0.9% in January, down from a 0.7% gain in December. Normally when the unemployment rate drops and wages increase much higher than the inflation rates consumer spending increases which fuels inflation. Consumer spending has surged for several years now. A drop in consumer spending in January could be a sign that consumers are feeling less optimistic about their finances. Investors will look to future months to see if this was just an outlier or if consumers are beginning to curtail their shopping. This was good news for mortgage rates and bond yields which dropped on Friday to end the week unchanged from last week’s rates.
The graph below shows the CPI rate since 2021.
Stock markets – The Dow Jones Industrial Average closed the week at 44,546.08, up 0.5% from 44,303.40 last week. It is up 4.7% year-to-date. The S&P 500 closed the week at 6,114.63, up 1.5% from 6,025.99 last week. The S&P is up 4% year-to-date. The Nasdaq closed the week at 20,026.77, up 2.6% from 19,523.40 last week. It is up 3.7% year-to-date.
U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 4.47%, down slightly from 4.49% last week. The 30-year treasury bond yield ended the week at 4.69%, unchanged from 4.69% 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 February 13, 2025, were as follows: The 30-year fixed mortgage rate was 6.87%, down slightly from 6.89% last week. The 15-year fixed was 6.09%, up slightly from 6.05% last week.
The graph below shows the trajectory of mortgage rates over the past year.
January’s home sales figures will be released next week by the California Association of Realtors and the National Association of Realtors. Those will be included in next week’s report. You can get the same data now for your city, county, or zip code from our website RodeoRe.com.
Mortgage Rate Update | February 13, 2025
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 February 13, 2025, were as follows:
The 30-year fixed mortgage rate was 6.87%, down from 6.89% last week. The 15-year fixed was 6.09%, up from 6.05% 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 February 8, 2025
The unemployment rate unexpectedly dropped in January – The Department of Labor and Statistics reported that 143,000 new jobs were added in January. While that was a little below expectations, the unemployment rate ticked down to 4% in January from 4.1% in December. The Fed has been trying to slow the economy and hiring to get the job market more balanced. Like everything else, when you have more jobs available than workers looking for jobs, wages go up. Last August the unemployment rate had risen to 4.2% and it seemed that the Fed was achieving its goal of slowing hiring. In September they began lowering rates in fear that the economy was slowing too quickly, but since then the economy has picked up steam and so has hiring, which has caused the unemployment rate to drop. The lower the unemployment rate, the fewer workers there are for available jobs which causes wages to rise. Average hourly wages increased 4.1% year-over-year in January, up from a 3.9% year-over-year increase in December. The Fed is pointing to higher wages as being a large contributor to inflation because more people with more money fuel consumer spending, which pushes prices higher.
Stock markets – The Dow Jones Industrial Average closed the week at 44,303.40, down 0.5% from 44,544.66 last week. It is up 4.1% year-to-date. The S&P 500 closed the week at 6,025.99, down 0.2% from 6,040.53 last week. The S&P is up 2.4% year-to-date. The Nasdaq closed the week at 19,523.40, down 0.5% from 19,627.44 last week. It is up 1.1% year-to-date.
U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 4.49%, down from 4.58% last week. The 30-year treasury bond yield ended the week at 4.69%, down from 4.83% 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 February 6, 2025, were as follows: The 30-year fixed mortgage rate was 6.89%, down from 6.95% last week. The 15-year fixed was 6.05%, down from 6.12% last week.
The graph below shows the trajectory of mortgage rates over the past year.
Mortgage Rate Update | February 6, 2025
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 February 6, 2025, were as follows:
The 30-year fixed mortgage rate was 6.89%, down from 6.95% last week. The 15-year fixed was 6.05%, down from 6.12% 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 February 1, 2025
Stock markets – The Dow Jones Industrial Average closed the week at 44,544.66, up 0.3% from 44,424.25 last week. It is up 4.7% year-to-date. The S&P 500 closed the week at 6,040.53, down 1% from 6,101.24 last week. The S&P is up 2.7% year-to-date. The Nasdaq closed the week at 19,627.44 down 1.6% from 19,954.39 last week. It is up 1.6% year-to-date.
U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 4.58% down from 4.63% last week. The 30-year treasury bond yield ended the week at 4.83%, down slightly from 4.85% 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 30, 2025, were as follows: The 30-year fixed mortgage rate was 6.95%, down from 6.96% last week. The 15-year fixed was 6.12%, down from 6.16% last week. The graph below shows the trajectory of mortgage rates over the past year. Economic update for the month ending January 31, 2025 Data released in January showed that inflation continued to rise in December – The Consumer Price Index (CPI) showed that consumer prices increased 2.9% year-over-year December, its third straight month of year-over-year increases, and its highest level in five months. The CPI peaked at 9.1% in June 2022 and worked its way down to a 2.4% year-over-year increase in September but has increased every month since September. Core CPI, which excludes volatile food and energy costs,rose 3.2% year-over-year in December, down from 3.3% in November. The Produce Price Index (PPI) showed that wholesale prices increased 3.3% year-over-year in December, up from a 3% year-over-year increase in November. Core PPI increased 3.5% year-over-year in December, up from 3.3% in November. The Personal-Consumption Expenditures Index (PCE), the Fed’s favorite gauge of inflation rose 2.6% year-over-year in December, up from a 2.4% year-over-year increase in November. U.S. Hiring Surged 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. More people working and higher wages fuels consumer spending which causes prices to rise. As inflation moves higher ot pushes up long-term interest rates like mortgage rates. Below is a chart of the CPI rate from 2021 Stock markets – The Dow Jones Industrial Average ended the month at 44,544.66, up 4.7% from 42,544.72 on December 31, 2024. The S&P 500 closed the month at 6,040.53, up 2.7% from 5,881.63 on December 31, 2024. The NASDAQ closed at 19,627.44, up 1.6% from 19,310.79 on December 31, 2024 U.S. Treasury Bond Yields increased in 2024 – The 10-year U.S. treasury bond yield closed the year at 4.58%, unchanged from 4.58% On December 31, 2024. The 30-year treasury yield ended the year at 4.83%, up from 4.78% on Dec. 31, 2024. 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 January 30, 2025, were as follows: The 30-year fixed mortgage rate was 6.95%, up from 6.85% last month. The 15-year fixed was 6.12%, up from 6.% last month. Home sales data is released on the third week of the month for the previous month by the California Association of Realtors and the National Association of Realtors. These are December’s home sales figures. U.S. existing-home sales December 2024 – T he National Association of Realtorsreported that existing-home sales totaled 4.24-million units on a seasonal annualized rate in December, up 9.3% from an annualized rate of 3.88-million units last December. The median price for a home sold in the U.S. in November was $404,400, up 6% from $387,800 one year ago. There was a 3.3-month supply of homes for sale in December, up from a 3.1-month supply in December 2023. F irst-time buyers accounted for 31% of all sales. Investors and second-home purchases accounted for 13% of all sales. All cash purchases accounted for 28% of all sales. Foreclosures and short sales accounted for 2% of all sales. California existing-home sales – The California Association of Realtors reported that existing-home sales totaled 268,180 on an annualized basis in December, up 19.8%from a revised 223,900 homes sold on an annualized basis last December. The statewide median price paid for a home in was $861,020 in December, up 5% from $819,820 one year ago. There was a 2.7-month supply of homes for sale in December, up slightly from a 2.6-month supply in December 2023. The graph below lists home sales data by county in Southern California. |
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