U.S. Hiring Surges – Employers added a quarter of a million jobs in September – The Department of Labor and Statistics reported that 254,000 new jobs were added in September, which exceeded the revised 159,000 new jobs that were added in August. It also blew away economists who were surveyed and forecasted 150,000 new jobs. The unemployment rate ticked down to 4.1% in September from 4.2% in August. Average hourly wages increased 4% year-over-year in September, up from a 3.8% annual increase in August. More people working, lower unemployment, and higher wages are inflationary. Bond yields and mortgage rates rose after the jobs report was released. Stock markets – Stock markets were on track for their first weekly loss in five weeks, but surged again on Friday after the September jobs report was released to end the week higher. The Dow Jones Industrial Average closed the week at 42,352.75, up 0.1% from 42,313.00 last week. It is up 12.4% year-to-date. The S&P 500 closed the week at 5,751.07, up 0.2% from 5,738.18 last week. The S&P is up 20.6% year-to-date. The Nasdaq closed the week at 18,137.85, up 0.1% from 18,119.59 last week. It is up 20.8% year-to-date. U.S. Treasury bond yields jumped on Friday after the September jobs report was released – The 10-year treasury bond closed the week yielding 3.98%, up from 3.75% last week. The 30-year treasury bond yield ended the week at 4.26%, up from 4.10% 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 October 3, 2024, were as follows: The 30-year fixed mortgage rate was 6.12%, up from 6.08% last week. The 15-year fixed was 5.25%, up from 5.16% 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. Have a great weekend! |
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Mortgage Rate Update | October 3, 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 October 3, 2024, were as follows:
The 30-year fixed mortgage rate was 6.12%, up from 6.08% last week. The 15-year fixed was 5.25%, up from 5.16% 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 | Month Ending September 30, 2024
Federal Reserve declares that inflation is under control and makes its first rate cut in four years – The Fed dropped its key interest rates by a ½% in September. With inflation spiking in 2022, the Fed enacted one of its most aggressive rate hike campaigns in history. They increased rates steadily until they hit a 25-year high. Now that inflation has worked its way down the Fed has begun a campaign of dropping rates to a more “neutral rate” from their previous “restrictive rate.” Experts expect two more rate drops before the end of the year, likely .25% each. The inflation reports for August were as follows: The Consumer Price Index (CPI) measured 2.5% in August. It peaked at 9.1% in June 2022 and has worked its way down slowly over the past twenty-eight months. The Producer Price Index (PPI) showed wholesale rose just 1.7% from last August. The Personal Consumption Expenditure Index (PCE) for August, a key gauge of inflation that the Fed focuses on to measure the cost of goods and services in the U.S. economy showed that the 12-month inflation rate was 2.2%, down from 2.5% in July and its lowest reading since February 2021. On Friday we will get the September Jobs report. That report will have an impact on bond yields and mortgage rates, which did not drop after the Fed announced its rate drop. That drop was expected and was already “built into” long-term bond yields and mortgage rates. The government released its third revision of the second quarter Gross Domestic Product (GDP), the broadest measure of the strength of the economy. It showed that the economy grew at a 3% annualized pace in the second quarter, a faster rate than Wall Street had expected. The Fed is pointing to a “soft landing” where they expect the economy to remain healthy while inflation continues to moderate. Many experts felt that the dramatic rise in rates would put the country into a recession but so far that has not happened. With the Fed now lowering rates the hope is that a recession will be avoided.
The graph below shows the movement of the Consumer Price Index from 2021 to the present.
Stock Markets – The Dow and S&P 500 closed September at record highs, and the NASDAQ closed just 2.5% off its record set in July. The Dow Jones Industrial Average closed the month at 42,330.15, up 1.8% from 41,563.08, on August 31, 2024. It is up 12.3% year-to-date. The S&P 500 closed the month at 5,762.58, up 2% from 5,648.40 last month. It is up 20.8% year-to-date. The NASDAQ closed the month at 18,189.17, up 2.7% from 17,713.63 last month. It is up 21.2% year-to-date.
U.S. Treasury bond yields – The 10-year treasury bond closed the month yielding 3.81%, down from 3.91% last month. The 30-year treasury bond yield ended the month at 4.14%, down from 4.20% 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 September 26th, 2024, were as follows: The 30-year fixed mortgage rate was 6.08%, down from 6.35% at the end of August. The 15-year fixed was 5.16%, down from 5.51% 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 was 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 August’s home sales figures.
U.S. existing-home sales August 2024 – The National Association of Realtors reported that existing-home sales totaled 3.86 million units on a seasonally adjusted annualized rate in August, down 4.2% from an annualized rate of 4.03 million last August. The median price for a home in the U.S. in August was $416,700, up 3.1% from $404,200 one year ago. There was a 4.2-month supply of homes for sale in August, up from a 3.3-month supply one year ago. First-time buyers accounted for 26% of all sales. Investors and second-home purchases accounted for 19% of all sales. All cash purchases accounted for 26% of all sales. Foreclosures and short sales accounted for 1% of all sales.
August California existing-home sales report – The California Association of Realtors reported that existing-home sales totaled 262,050 on an annualized rate in August, up 2.8% from a revised 254,820 homes sold on an annualized basis last August. The statewide median price paid for a home in July was $888,740, up 3.4% from $859,670. one year ago. There was a 3.2-month supply of homes for sale, up from a 2.4-month supply in August 2023.
The graph below lists home sales data by county in Southern California.
Economic Update | Week Ending September 28, 2024
Economic news for the week – The August Personal Consumption Expenditure Index (PCE), a key gauge the Fed uses to evaluate U.S. goods and services costs, was released. It showed that the 12-month inflation rate was 2.2%, down from 2.5% in July and its lowest reading since February 2021. The Bureau of Economic Analysis released its third revision of the second quarter Gross Domestic Product (GDP), the broadest measure of the strength of the economy. It showed that the economy grew at a 3% annualized pace in the second quarter, a faster rate than Wall Street had expected. These reports were another indicator that the Fed may be correct in their expectations of a “soft landing,” where inflation comes under control and the economy remains strong. We are seeing investors feeling optimistic as well. They pushed stock markets higher again this week. Stock markets have closed higher in six of the last seven weeks. All indexes hit record highs this week with the Dow closing the week at an all-time high and the Nasdaq and S&P 500 closing just off their highs set earlier in the week. It appears that investors are very optimistic about the prospects of lower interest rates and the strength of the economy.
Stock markets – The Dow Jones Industrial Average closed the week at 42,313.00, up 0.6% from 42,063.36 last week. It is up 12.3% year-to-date. The S&P 500 closed the week at 5,738.18, up 0.6% from 5,702.55 last week. The S&P is up 20.3% year-to-date. The Nasdaq closed the week at 18,119.59, up 1% from 17,948.32 last week. It is up 20.7% year-to-date. U.S. Treasury bond yields are slightly up this week – The 10-year treasury bond closed the week yielding 3.75%, up slightly from 3.73% last week. The 30-year treasury bond yield ended the week at 4.10%, up slightly from 4.07% 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 September 26, 2024, were as follows: The 30-year fixed mortgage rate was 6.08%, almost unchanged from 6.09% last week. The 15-year fixed was 5.16%, almost unchanged from 5.15% 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 | September 26, 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 September 26, 2024, were as follows:
The 30-year fixed mortgage rate was 6.08%, down from 6.09% last week. The 15-year fixed was 5.16%, up from 5.15% 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 September 21, 2024
The Federal Reserve began its cycle of rate cuts with the first rate cut in four years – Declaring that inflation has come under control, the Fed dropped its key rates by ½% on Wednesday. With inflation spiking bringing the CPI to 9.1% in June 2022 the Fed enacted one of the most aggressive rate hike campaigns in history. They increased rates steadily until they hit a 25-year high. Now that the CPI has worked its way down, it measured 2.5% in August, the Fed has begun a campaign of dropping rates to a more “neutral rate” from their previous “restrictive rate.” Experts expect two more drops before the end of the year, likely .25% each. Next Friday we will get the Personal Consumption Expenditures (PCE) report, a gauge of inflation that is a Fed favorite. One week from Friday we will get the September Jobs report. Those reports will have an impact on bond yields and mortgage rates which did not drop after the Fed announced their rate drop. That drop was expected and was already “built into” long-term bond yields and mortgage rates.
Stock markets – The Dow Jones Industrial Average closed the week at 42,063.36, up 1.6% from 41,393.78 last week. It is up 11.6% year-to-date. The S&P 500 closed the week at 5,702.55, up 1.4% from 5,626.78 last week. The S&P is up 19.6% year-to-date. The Nasdaq closed the week at 17,948.32, up 1.5% from 17,683.98 last week. It is up 19.6% year-to-date. U.S. Treasury bond yields up slightly this week – The 10-year treasury bond closed the week yielding 3.73%, up from 3.66% last week. The 30-year treasury bond yield ended the week at 4.07%, up from 3.93% 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 September 19, 2024, were as follows: The 30-year fixed mortgage rate was 6.09%, down from 6.2% last week. The 15-year fixed was 5.15%, down from 5.27% 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 August’s home sales figures. U.S. existing-home sales August 2024 – The National Association of Realtors reported that existing-home sales totaled 3.86 million units on a seasonally adjusted annualized rate in August, down 4.2% from an annualized rate of 4.03 million last August. The median price for a home in the U.S. in August was $416,700, up 3.1% from $404,200 one year ago. There was a 4.2 months’ supply of homes for sale in August, up from a 3.3 months’ supply one year ago. First-time buyers accounted for 26% of all sales. Investors and second-home purchases accounted for 19% of all sales. All-cash purchases accounted for 26% of all sales. Foreclosures and short sales accounted for 1% of all sales. August California existing-home sales report – The California Association of Realtors reported that existing-home sales totaled 262,050 on an annualized rate in August, up 2.8% from a revised 254,820 homes sold on an annualized basis last August. The statewide median price paid for a home in July was $888,740 , up 3.4% from $859,670. one year ago. There was a 3.2 months’ supply of homes for sale, up from a 2.4-months’ supply in August 2023. The graph below lists home sales data by county in Southern California. Have a great weekend! |
Mortgage Rate Update | September 19, 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 September 19, 2024, were as follows:
The 30-year fixed mortgage rate was 6.09%, down from 6.2% last week. The 15-year fixed was 5.15%, down from 5.27% 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 September 14, 2024
Economic data this week – The August reading of the Consumer Price Index (CPI) showed that consumer inflation continues to moderate. Consumer prices rose 2.5% from one year ago, down 0.4% from July’s annual level of 2.9%, and the lowest annual rate since February 2021. The CPI rate peaked at 9.1% in June of 2022 and has worked its way down gradually. The Produce Price Index (PPI) was also released this week. It showed that wholesale rose just 1.7% from last August. Unfortunately, core PPI, which excludes food and energy moved up 3.3% from one year ago. The difference between the PPI and the Core PPI was mainly attributed to lower energy costs as oil prices have dropped significantly from one year ago. Next week the Fed will drop their key interest rates for the first time in four years. It is widely believed that it will be a .25% drop, as a .5% drop so close to the election could have political implications.
The graph below shows the movement of the Consumer Price Index from 2021 to the present. Stock markets – Stock market indexes made up last week’s losses to end the week up sharply. The Dow Jones Industrial Average closed the week at 41,393.78, up 2.6% from 40,345.42 last week. It is up 9.8% year-to-date. The S&P 500 closed the week at 5,626.78, up 4% from 5,408.42 last week. The S&P is up 18% year-to-date. The Nasdaq closed the week at 17,683.98, up 5.9% from 16,690.83 last week. It is up 17.8% year-to-date. U.S. Treasury bond yields dropped sharply this week – The 10-year treasury bond closed the week yielding 3.66%, down from 3.72% last week. The 30-year treasury bond yield ended the week at 3.98%, down from 4.03% 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 September 12, 2024, were as follows: The 30-year fixed mortgage rate was 6.2%, down from 6.35% last week. The 15-year fixed was 5.27%, down from 5.47% 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 | September 12, 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 September 12, 2024, were as follows:
The 30-year fixed mortgage rate was 6.2%, down from 6.35% last week. The 15-year fixed was 5.27%, down from 5.47% 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.