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Stocks flat for the week – The Dow Jones Industrial Average, S&P 500, and the NASDAQ reached all-time highs on Monday, before losing ground and ended the week almost unchanged. Oil strengthened which could help oil producing regions, and the dollar softened which could be good for exports if these trends continue. The Federal Reserve released its July meeting minutes on Wednesday, but there was little impact, as committee members gave no detail about when they plan to raise rates next. The committee left the door open for a September or December rate hike, but the minutes showed that members have mixed views on the employment and inflation trends, along with the impact Brexit will have, indicating that they will raise rates at a very slow pace. The Dow Jones Industrial Average closed the week at 18,552.57, down slightly from 18,576.47 last Friday. The S&P 500 closed the week at 2,183.87, almost unchanged from 2,184.05 last week. The NASDAQ closed the week at 5,238.38, almost unchanged from last week’s close of 5,232.90.

Bond yields slightly higher – The 10 year U.S. Treasury bond yield closed the week at 1.58%, up from 1.51% last Friday. The 30-year U.S. Treasury bond closed at 2.29%, up from 2.23% last week. Mortgage rates follow bond yields so we watch bond yields closely.

Mortgage rates remain near record lows – The Freddie Mac Primary Mortgage Survey released on August 18, 2016 showed that average mortgage rates from lenders surveyed for the most popular mortgage products were as follows: The 30-year fixed rate average was 3.43%. The 15-year fixed average rate was 2.74%. The 5/1 ARM average rate was 2.76% 

California employers add 36,400 new jobs in July – The Employment Development Department reported that California’s employers added 36,400 new jobs in July. Although this was considered solid job gains by experts, the unemployment rate actually rose from 5.4% in June to 5.5% in July, as more workers entered the job search. 

Number of existing homes sold in July drops as tight inventory puts a squeeze on sales – The California Association of Realtors reported that the number of existing homes sold in California declined 4.1% from June’s sales pace and 5.1% from last July’s annualized rate as historically low inventory levels dragged down sales. The statewide median price in July was $509,830 which was down 1.8% from June and up 3.9% from July 2016. The unsold inventory index edged up from a 3.2 month supply in June to a 3.6 month supply in July.

Have a great weekend!
Syd

Stocks up slightly this week – The DOW, S&P, and NASDAQ hit record highs again on Thursday, as investors responded to higher oil prices, and strong second quarter earnings from several large retailers. With almost all companies in the S&P 500 reporting, 69% beat analysts’ earnings estimates. Unfortunately, Friday after a disappointing retail sales report, and a drop in the producer price index stocks dropped as investors digested that spending stalled in July, despite two months of very strong job growth. The Dow Jones Industrial Average closed the week at 18,576.47, up slightly from 18,543.53 last Friday. The S&P 500 closed the week at 2,184.05, up slightly from 2,182.87 last week. The NASDAQ closed the week at 5,232.90, up from last week’s close of 5,221.12.

Bond yields drop – Weak July retail sales data, and falling producer prices caused bond yields to drop. It is widely felt that with inflation below the Fed’s target rate, and spending softening the Fed will not be raising its key interest rates. The 10 year U.S. Treasury bond yield closed the week at 1.51%, down from 1.59% last Friday. The 30-year U.S. Treasury bond closed at 2.23%, down from 2.32% last week. Mortgage rates follow bond yields so we watch bond yields closely.

Mortgage rates remain near record lows – The Freddie Mac Primary Mortgage Survey released on August 11, 2016 showed that average mortgage rates from lenders surveyed for the most popular mortgage products were as follows: The 30-year fixed rate average was 3.45%. The 15-year fixed average rate was 2.77%. The 5/1 ARM average rate was 2.74%. 

Retail sales unchanged from June – The Commerce Department reported that retail sales in July showed no increase over June’s figure which increased 0.8% from May. Still retail sales rose 2.3% from a year ago, but economists had expected sales to rise 0.4% in July. After two months of very strong job growth experts were not expecting spending to weaken. 

Producer Price Index takes unexpected drop – The Labor Department reported that the producer price index, a key measure of inflation dropped 0.4% last month. Year over year the index shows that producer prices have slipped 0.2% since last July. Fed officials have repeatedly expressed concern about low inflation, as a strong dollar and low oil prices have muted prices.

Employers add 255,000 new jobs in July – The Bureau of Labor Statistics reported that U.S. employers added 255,000 net new jobs in July. Expectations were in the 180,000 new jobs range. Job gains had stalled out in the beginning of the year, bottoming out in May when only 24,000 new jobs were created, the worst month since the recovery began. Jobs rebound in June with a revised figure of 292,000 new jobs, one of the best months ever, and now in July with 255,000 new jobs created. July marked 70 straight months of job gains. The only sector that lost jobs in July was oil and mining, as low oil prices have caused companies to cut production. The unemployment rate held steady at 4.9%. Hourly wages also ticked up slightly bringing wages up 2.6% from last July, up from 2.2% for the 12 months ending July 2015. Wages were increasing between 3% and 3.5% annually before the recession. 

Stocks rise following strong job gains – NASDAQ and S&P at all time highs – Stocks rose Friday following the announcement of an interest rate cut by The Bank of England and other measures to stimulate the economy in the United Kingdom, and a stronger than expected U.S. new jobs report that showed that employers added 255,000 new jobs in July. Stocks had slid throughout the week. Last Friday’s GDP announcement that the economy grew just 1.2% last quarter weighed on the market early in the week.investors also pulled back due to falling oil prices which slipped to $41 per barrel, after hitting $50 a barrel in June. Oil was $120 a barrel two years ago before beginning a steep slide, bottoming out at $28 a barrel in February. Oil prices had been on the rise until slipping over the past few weeks. The Dow Jones Industrial Average closed the week at 18,543.53, up from 18,432.24 last Friday. The S&P 500 closed the week at 2,182.87, an all time high, up from 2,173.60 last week. The NASDAQ closed the week at 5,221.12, also a record high, up from last week’s close of 5,162.13. 

Bond yields rise – Investors moved funds from bonds to stocks pushing rates up. The 10 year U.S. Treasury bond yield closed the week at 1.59%, up from 1.46% last Friday. The 30-year U.S. Treasury bond closed at 2.32%, up from 2.18% last week. Mortgage rates follow bond yields so we watch bond yields closely. Mortgage rates rose with bonds at the end of the week.

Mortgage rates – The Freddie Mac Primary Mortgage Survey released on August 4, 2016 showed that average mortgage rates from lenders surveyed for the most popular mortgage products were as follows: The 30-year fixed rate average was 3.43%. The 15-year fixed average rate was 2.74%. The 5/1 ARM average rate was 2.73%. Rates were about 1/8% higher to end the week, so expect next week’s survey to reflect that.

Have a great weekend!

Syd

Second quarter GDP disappointing – The Commerce Department reported that U.S. economy expanded less than forecasted in the second quarter after a weaker start to the year than previously estimated as companies slimmed down inventories and remained wary of investing amid shaky global demand. Gross domestic product rose at a 1.2 percent annualized rate after a 0.8 percent advance in the first quarter. The median forecast of economists surveyed called for a 2.5 percent second-quarter increase. The report raises the risk to the outlook at a time Federal Reserve policy makers are looking for sustained improvement. While consumers were resilient last quarter, businesses were cautious, cutting back on investment and aggressively reducing stockpiles amid weak global markets, heightened uncertainty, and the lingering drag from a stronger dollar.

Stocks stable this week after 4 weeks of gains – Stocks ended the month higher even though the DOW was down for the week. The Dow was dragged down partly because Exxon Mobil Corp posted its biggest loss since 1999 and Chevron corp also posted a loss for the second quarter. They are both Dow stocks. Oil also fell back to $41 a barrel after hitting $50 a barrel at the end of June. The Dow Jones Industrial Average closed the week at 18,432.24, down from 18,570.85 last Friday, but up for the month from 17,929.99 on June 30. The S&P 500 closed the week at 2,173.60, unchanged from 2,175.03 last week. It was up from 2,098.86 on June 30. The NASDAQ closed the week at 5,162.13, up from last week’s close of 5,100.06, and up from 4,842.67 on June 30, 2016.

Bond yields down for the week and end the month pretty much unchanged – After rising last week yields held steady this week. The 10 year U.S. Treasury bond yield closed the week at 1.46%, down from 1.57% last Friday. It was 1.49% on June 30. The 30-year U.S. Treasury bond closed at 2.18%, down from 2.29% last week. The 30 year yield was 2.30% on June 30. Mortgage rates follow bond yields so we watch bond yields closely.

Mortgage rates – Mortgage rates still near historic lows. The Freddie Mac Primary Mortgage Survey released on July 28, 2016 showed that average mortgage rates from lenders surveyed for the most popular mortgage products were as follows: The 30-year fixed rate average was 3.48%. The 15-year fixed average rate was 2.78%. The 5/1 ARM average rate was 2.78%.

U.S. existing home sales at highest pace since February 2007 – The National Association of Realtors reported that existing home sales which include single family homes, condominiums, town-homes, and co-ops climbed 1.1% in June from May to a seasonally adjusted annual rate of 5.57 million. That was 3% higher than the 5.41 million in June 2015. It marks the highest number of sales since February 2007. Boosted by a greater share of sales to first-time buyers not seen in nearly four years, existing-home sales maintained their upward trajectory in June and increased for the fourth consecutive month, according to the National Association of Realtors. Only the Northeast saw a decline in closings in June. Sales to investors fell to their lowest overall share since July 2009. June pending home sales, homes under contract, also rose slightly. 

California pending home sales post third straight year over year increase in June – The California Association of Realtors reported that pending existing home sales continued their upward momentum in June to post three straight months of annual increases. Statewide pending home sales rose in June on an annual basis, with the Pending Home Sales Index (PHSI)* increasing 3.2 percent in June 2016 from June 2015, based on signed contracts. With pending sales on a rising trend in the past couple of months, June’s increase should lead to higher closed transactions in July and August. Pending home sales in Southern California as a whole rose 3.2 percent from June 2015 and 1.3 percent from May 2016, thanks to year-over-year gains of 5.5 percent in Los Angeles County, 4.1 percent in San Bernardino County, and 1.3 percent in San Diego County. Orange County experienced a 6.0 percent decrease from the previous year. 

New home sales hit highest pace in 8 years – Commerce Department data showed that new home sales increased 3.5% in June to an annualized rate of 592,000 homes. Experts had forecast an annualized rate of 560,000 homes. Purchases of new U.S. single-family homes rose in June to the highest level in more than eight years, indicating a firm and resilient housing market. 

California adds 40,299 jobs in June, but the sate’s unemployment rate was higher – The Bureau of Labor Statistics reported that although the state added over 40,000 jobs in June, the unemployment rate rose 0.2% in June to 5.4%. California’s unemployment rate peaked at 12.2% in February 2010 and is now 6.8% lower that at the height of the recession. June’s unemployment rate of 5.4% was up from May’s post recession low of 5.2%. 

Have a great weekend!
Syd

Stocks up for fourth straight week – Sparked by second quarter quarterly profits coming in above expectations, continued low interest rates, and better than expected economic reports stocks continued to advance. The Dow Jones Industrial Average closed the week at 18,570.85, up from 18,516.56 last Friday. The S&P 500 closed the week at 2,175.03, up from 2,161.75 last week. The NASDAQ closed the week at 5,100.06, up from last week’s close of 5,029.50. 

Bond yields unchanged for the week – After rising last week yields held steady this week. The 10 year U.S. Treasury bond yield closed the week at 1.57%, almost unchanged from 1.60% last Friday. The 30-year U.S. Treasury bond closed at 2.29%, unchanged from 2.30% last week. Mortgage rates follow bond yields so we watch bond yields closely.

Mortgage rates – Mortgage rates were slightly higher this week, yet still near historic lows. The Freddie Mac Primary Mortgage Survey released on July 21, 2016 showed that average mortgage rates from lenders surveyed for the most popular mortgage products were as follows: The 30-year fixed rate average was 3.45%. The 15-year fixed average rate was 2.75%. The 5/1 ARM average rate was 2.78%.

California’s existing home sales up 10% in June – The California Association of Realtors reported that the number of existing homes sold in California were up 10% in June over May’s seasonally adjusted annualized number. It marked the first month over month double digit gain since January 2011. The statewide median price home in June was $519,440 up 5.5% from last June, as tight inventory levels and low interest rates continue to push up home prices. The unsold inventory index showed that inventory levels of existing homes dropped from a 3.4 month supply in May to a 3.2 month supply in June. The long run average has been a 6.1 month supply, indicating that inventory levels are running about 60% of normal, according to CAR. 

Have a great weekend!
Syd

Stocks rise again this week – Stocks were up for a third week in a row reaching a series of record highs. The sharp rebound has been fueled by better than expected economic data, higher expectations for second quarter corporate earnings, and low interest rates. The Dow Jones Industrial Average closed the week at 18,516.55, up from 18,146.75 last Friday. The S&P 500 closed the week at 2,161.75, up from 2,129.90 last week. The NASDAQ closed the week at 5,029.50, up from last week’s close of 4,956.76.

Bond yields rise this week – After dropping steadily for 3 straight weeks bond yields rose this week. The 10 year U.S. Treasury bond yield closed the week at 1.60%, up from 1.37% last Friday. The 30-year U.S. Treasury bond closed at 2.30%, up from 2.11% last week. Mortgage rates follow bond yields so expect mortgage rates to rise slight next week. 

Mortgage rates – Mortgage rates were slightly higher this week, yet still near historic lows. The Freddie Mac Primary Mortgage Survey released on July 14, 2016 showed that average mortgage rates from lenders surveyed for the most popular mortgage products were as follows: The 30-year fixed rate average was 3.42%. The 15-year fixed average rate was 2.72%. The 5/1 ARM average rate was 2.76%.

Industrial production outpaces expectations in June – Industrial production rose 0.6% in June, it’s largest increase in 11 months, according to the Federal Reserve. Economists had forecasted a 0.3% increase. Robust auto production lifted the consumer durables category, as the output of consumer energy products also jumped. Manufacturing output rose 0.4% in June. But in the second quarter, factory output fell at an annual rate of 1%. The index for utilities climbed 2.4% due to warmer weather that increased demand for air conditioning. 

Retail sales beat expectations in June – The Commerce Department Reported that retail sales rose 0.6% in June. It was the third straight month of increases after sales seemed to be stalling in the beginning of the year. Sales are now up 2.7% from one year ago. Economists had expected just a 0.1% increase. 

Home sales figures for June should be available next week. They will include, number of sales, median price changes, and home inventory levels.

Have a nice weekend!
Syd 

Employers add 287,000 new jobs in June – The Labor Department reported that U.S. employers added 287,000 net new jobs in June, easing fears of that job growth was faltering, after 3 months of lackluster growth. June marked the largest number of new jobs created since October 2015. The unemployment rate increased from 4.7% in May to 4.9% in June, as more workers entered the workforce. Another positive in the report was that wage growth, which has shown signs of improvement after many years of stagnation, was up 2.6% from one year ago. 

Stocks up again this week – S&P and DOW approach record highs – Stocks surged yesterday following the release of a surprisingly strong jobs report. Over the past few months job gains have been very disappointing, suggesting that job growth was faltering. This report, the strongest gains since last October, eased some fears. Stocks have made up all their loses and more following the Brexit vote over the last two weeks. The Dow Jones Industrial Average closed the week at 18,146.75. up from 17,949.37 last Friday. The S&P 500 closed the week at 2,129.90 up from 2,102.95 last week. The NASDAQ closed the week at 4,956.76, up from last week’s close of 4,862.57.

Historically low Bond yields drop again this week – The 10 year U.S. Treasury bond yield closed the week at 1.37%, down from 1.46% last Friday. The 30-year U.S. Treasury bond closed at 2.11%, down slightly from 2.24% last week. Mortgage rates follow bond yields so this is great news for loan rates.

Mortgage rates at historic low levels – Mortgage rates fell again this week. The Freddie Mac Primary Mortgage Survey released on July 7, 2016 showed that average mortgage rates from lenders surveyed for the most popular mortgage products were as follows: The 30-year fixed rate average was 3.41%. The 15-year fixed average rate was 2.74%. The 5/1 ARM average rate was 2.68%.  

Realtor.com chief economist predicts best summer for the housing market in a decade – Jonathan Smoke, chief economist for Realtor.com reported that following the strongest spring in 10 years, the residential real estate market should continue to see growth throughout the summer despite some growing economic headwinds. Through May, year to date home sales (that’s non-adjusted existing and new-home sales combined) are up 6 percent, over the last year, which is the best year since 2007, according to Smoke’s calculations using the NAR and Commerce Department data. 

Have a great weekend!

Stocks have a wild week and end the month higher in June – Stock markets were fairly stable in June until the last week when stocks fell sharply after The British people voted to leave the European Union. By Monday all markets had dropped significantly, but the markets rallied to end the month up making up all the losses in the last three days. The Dow Jones Industrial Average closed the month at 17,929.99, up from it’s close last month of 17,787.31 on May 31. The S&P 500 closed the month at 2,098.86, just slightly above 2,096.95 on May 31. The NASDAQ closed May 31 at 4,842.67, down from 4,948.05 at the end of May. 

For the week ending July 2 – Stocks post best 4 day streak since February – The Dow Jones Industrial Average closed the week at 17,949.37, up significantly from 17,400.75 last Friday. The S&P 500 closed the week at 2,102.95, up from 2,037.41 last week. The NASDAQ closed the week at 4,862.57, also up from last week’s close of 4,707.98.

Bond yields fall to lowest levels in decades – The 10 year U.S. Treasury bond yield closed June at 1.49%, down significantly from 1.85% on May 31. The 30 year U.S. Treasury bond closed June 30 at 2.30%, down from 2.63% at the end of May. Mortgage rates follow bond rates so we watch bond rates carefully.

Bond yields drop again this week – The 10 year U.S. Treasury bond yield closed the week at 1.46%, down from 1.52% last Friday. The 30-year U.S. Treasury bond closed at 2.24%, down slightly from 2.42% last week.  

Mortgage rates at historic low levels – The Freddie Mac Primary Mortgage Survey released on June 30, 2016 showed that average mortgage rates from lenders surveyed for the most popular mortgage products were as follows: The 30-year fixed rate average was 3.48%. The 15-year fixed average rate was 2.78%. The 5/1 ARM average rate was 2.70%.  

California’s unemployment rate dips to 5.2% – The Employment Development Department reported that California employers’s added 15,200 net new jobs in May. While the number of new jobs added was below what analysts expected, the unemployment rate fell from 5.3% in April to 5.2% in May. The unemployment rate in May 2015 was 6.4%, so being at 5.2% is a 1.2% drop year over year! 

Federal Reserve leaves rates unchanged in June – Amid worries of slowing job growth, The Federal Open Market Committee declined to raise it’s interest rate target at this week’s two day meeting from 0.5%. Fed chairperson, Janet Yellen signaled late last year that there could be as many as 6 increases in 2016. As the labor market growth has slowed and economic growth no longer at last year’s levels, Fed officials are signaling that there may only be one or two increases in 2016. 

California existing home sales and prices up in May – The California Association of Realtors reported that existing home sales in California totaled 410,190 in May on a seasonally adjusted annual rate. That is up 0.6% from April and down 3.2% from last May. Tight inventory has impacted the number of sales, as there was just a 3.4 month supply of homes on the market in May, down from 3.5 months in April. A 6-7 month supply is considered normal. The median price paid for a single family home in California rose to $518,760 in May from $509,590 in April. 

Pending home sales rise in California – The California Association of Realtors reported on Thursday that statewide pending existing home sales rose 3.8% in May from May 2015. This was welcome news as year over year closed home sales dropped dropped in May on a year over year basis. They also reported that pending home sales in Southern California rose 5.6% on a year over year basis compared to May 2015. We look at pending sales to gage what closed sales will be a month or two later when they close.

U.S existing home sales hit their highest pace in over a decade – The National Association of Realtors reported that total existing home sales, which include single family homes, condos, town-homes, and co-ops, were up 4.5% in May from May 2015. The total number of sales on a annualized adjusted rate was 5.53 million homes in May 2016. May was the highest annual pace since February 2007 when sales hit 5.79 million. 

U.S. Pending home sales lower in May – After three months gains in pending home sales, measured by homes that went under contract, The National Association of Realtors announced that pending home sales in May slipped 3.7% from April’s figures. Year over year pending sales were down 0.2% from last May. Tight inventory is thought to be the reason for sales being off. Pending sales which include resale, not new homes, include single family homes, condos, town houses, and co-ops. 

The markets are all waiting for the monthly jobs report. They come out on the first Friday of every month, but not when Friday is the first of the month. Next Friday we will have June’s job figures. 

Have a great 4th of July Holiday weekend!
Syd 

Stocks suffer worst day in 10 months following British vote to leave European Union – Stocks declined worldwide on Friday following results of British vote to leave the European Union. Stocks were up for the week until Friday morning. Polling suggested that the British people would vote to remain in the European Union. Following the results the British prime minister, David Cameron, resigned adding further uncertainty. Nobody knows what the financial impact will be. Many felt that predictions of recession in Europe and The U.K. If the Brits voted to leave the EU were overblown to scare the British people into voting to remain in the EU, but nobody really knows for sure what the impact will be and if other countries will follow. The Dow Jones Industrial Average closed the week at 17,400.75, down from 17,675.16 last Friday. The S&P 500 closed the week at 2,037.41, down from 2,071.22 last week. The NASDAQ closed the week at 4,707.98, down from last week’s close of 4,800.34.

Bond yields remain at 3-year low – The 10 year U.S. Treasury bond yield closed the week at 1.52%, down from 1.62% last Friday. The 30-year U.S. Treasury bond closed at 2.42%, down slightly from 2.44% last week. Mortgage rates follow bond rates so we watch bond rates carefully.

Mortgage rates at 3-year low – The Freddie Mac Primary Mortgage Survey released on June 23, 2016 showed that average mortgage rates from lenders surveyed for the most popular mortgage products were as follows: The 30-year fixed rate average was 3.56%. The 15-year fixed average rate was 2.83%. The 5/1 ARM average rate was 2.74%. Rates dropped with stocks on Friday so rates are currently a little lower. 

Pending home sales rise in California – The California Association of Realtors reported on Thursday that statewide pending existing home sales rose 3.8% in May from May 2015. This was welcome news as year over year closed home sales dropped dropped in May on a year over year basis. They also reported that pending home sales in Southern California rose 5.6% on a year over year basis compared to May 2015.  

U.S existing home sales hit their highest pace in over a decade – The National Association of Realtors reported that total existing home sales, which include single family homes, condos, town-homes, and co-ops, were up 4.5% in May from May 2015. The total number of sales on a annualized adjusted rate was 5.53 million homes in May 2016. May was the highest annual pace since February 2007 when sales hit 5.79 million. 

Have a great weekend,
Syd

Below is the Westside Market Report for May 2016 detailing local real estate market statistics and including year-over-year data:

Westside