151,000 new jobs were added in February – The Department of Labor and Statistics reported that 151,000 new jobs were added in February, up from a revised 125,000 new jobs added in January. While that was below the 160,000 economists had forecasted, the government shed 10,000 jobs, so 161,000 non-government jobs were added. The unemployment rate ticked up to 4.1%, from 4% in January. It was 4.1% in December. Average hourly wages increased 4% in February from one year ago, down slightly from a 4.1% annual increase in January.

Stock markets – The Dow Jones Industrial Average closed the week at 42,801.72, down 2.4% from 43,840.91 last week. It is up 0.6% year-to-date. The S&P 500 closed the week at 5,710.20, down 4.1% from 5,954.50 last week. The S&P is down 2.9% year-to-date. The Nasdaq closed the week at 18,196.22, down 3.5% from 18,847.28 last week. It is down 6.8% year-to-date.

U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 4.32%, up from 4.24% last week. The 30-year treasury bond yield ended the week at 4.62%, up from 4.51% 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 March 6, 2025, were as follows: The 30-year fixed mortgage rate was 6.63%, down from 6.76% last week. The 15-year fixed was 5.79%, down from 5.94% last week.

The graph below shows the trajectory of mortgage rates over the past year

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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

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.

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