2.6 million new jobs were added in 2018 as unemployment dropped to a 40-year low – The Bureau of Labor Statistics reported that U.S. employers added 312,000 new
jobs in December. This shocked analysts that had forecasted 178,000 new jobs.
There were 2.6 million jobs added in 2018, up from 2.2 million new jobs in 2017. The unemployment rate rose to 3.9% from 3.7% in November, a 40-year low, as 419,000 new workers entered the workforce. Optimism about finding an acceptable job and
higher wages were credited with expanding the workforce. Wages rose 3.2% from
one year earlier, matching October’s year over wage gains which marked the largest
year over year wage gain since April 2009.

Stock markets ended the year lower in 2018 – After hitting all-time highs in
September, which marked the longest bull market in history, stocks took a downturn in the last quarter of the year. December marked the worst December drop since the Great Depression as fears of a trade war, political uncertainty, slowing economic activity overseas, and higher interest rates made investors more cautious. The Dow Jones Industrial Average ended 2018 at 23,327.46, down from 24,719.22 at the close of 2017.The S&P 500 closed the year at 2,506.85, down from 2,673.51 at the end of 2017. The NASDAQ closed at 6,635.28, down from 6,903.39 on December 31, 2017.

U.S. Treasury Bond Yields higher in 2018 – The 10-year U.S. treasury bond closed the year at a 2.69% yield, up from 2.40% on December 31, 2017. The 30-year treasury yield ended the year at 3.02%, up from 2.74% on December 31, 2017.Mortgage Rates higher in 2018 – The December 28, 2017 Freddie Mac Primary Mortgage Survey reported that the 30 year fixed mortgage rate average was 4.55%, up from 3.99% on December 29, 2017. The 30-year fixed rate was over 5% in October before
declining in November and December. The 15-year fixed was 4.01%, up from 3.44% . last December. The 5-year ARM was 4.00%, up from 3.55% at the close of 2017. Fortunately, rates dropped in the final quarter. The 30-year hit 5% in September.

Year over year price gains moderated in 2018 after 7 years of price gains. For the first 7 months of the year we saw the same month year over year price increases of
6-8%, but by years end those prices were just 1.5% above the same month one year earlier – The California Association of Realtors reported that existing home sales
totaled 372,260 in December on a seasonally adjusted annualized basis. That was
down 11.6% from last December. It marked the fewest sales in a month since January 2015. The statewide median price was $557,600, up 1.4% from December 2017.
On a regional basis Los Angeles County’s median-price of $588,140 was up 1.8%
from last December. Orange County had a median price of $785,000, down 0.1%
from December 2017. Ventura County’s median price of $640,000 was down 0.8% from last December. Inventory levels also continued to rise. Active listings have
increased 30% from 2017. The unsold inventory index hit record lows before moving up steadily in the last 9 months of 2018. There was a3.5-month supply of homes
listed in California, up from a 2.5-month supply in December 2017. It should be noted that a “normal market” has a six-month supply of homes listed, so inventory levels
which are well above the all-time lows of 2017 are still at low historical levels.
Los Angeles County had a 3.5-month supply, up from a 2.4-month supply last
December. Orange County had a 4-month supply, down from 2.6 months last
December. Ventura County had a 5.5-month supply, up from a 4-month supply in
December 2017.

Economic update for the month ending September 30, 2018

U.S. Economy adds 134,000 new jobs in September – Unemployment rate dropped to the lowest level since 1969:

The Department of Labor Statistics reported that U. S. employers added 134,000 new jobs in September. That was below the 185,000 that analysts had estimated, yet even though job creation fell to its lowest level in a year the unemployment rate dropped to its lowest level in 49 years. The national unemployment rate in September was 3.7%, down from 3.9% in August. Average hourly wages rose 2.8% year over year from last September. That was slightly lower than last month when average hourly wages increased 2.9% from last August.

California employers add 44,800 new jobs in August:

The California Employment Development Department reported that 44,800 new jobs were added in August. The unemployment rate held steady at a record low of 4.2%, down from 4.6% last August. Average hourly wages grew 3.1% year over year, their largest year over year increase since last October. Los Angeles and Orange County average hourly earnings grew 5.4% from last August.

Stock Market Update:

The Dow Jones Industrial Average closed the month at 26,458.31, down from 25,964.62 last month. It is up 7% year to date. The S&P 500 closed the month at 2,913.98, down from 2,901.52 on August 31 It’s up 9% year to date. The NASDAQ closed the month at 8,046.35, down from 8,109.54 last month. It’s up 16% year to date.

Treasury Bond Yields rise:

The 10-year treasury bond closed the month yielding 3.05%, up from 2.86% on August 31, 2018. The 30-year treasury bond yield ended the month at 3.19%, up from 3.02% at the end of August.

Mortgage rates higher in September:

The September 27, 2018 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 4.72%, up from 4.52% on August 30, 2018. The 15-year fixed was 4.16%, up from 3.97% in August 30. The 5-year ARM was 3.97%, up from 3.85% last month.

Consumer Confidence at highest level hits 18 year high in September:

The U.S. Consumer Confidence Index hit its highest level since 2000 this week according to data from the Conference Board’s September survey.

New home sales rebound in August:

The Commerce Department reported that sales of new homes increased 3.6% in August from July on a seasonally adjusted annualized rate. Year over year the number of new homes sold in August increased 12.7% from August 2017. The median price paid for a new home increased 1.9% from one year ago.

California existing home sales numbers drop in August – Prices continue to rise:

The California Association of Realtors reported this week that the number of existing home sales dropped in August to a seasonally adjusted annualized rate of 399,600. It was the fourth straight month of sales declines and the first time in over two years that the number of existing home sales dropped below the benchmark 400,000 level. The median price of a home in California rose to $596,410, up 6.6% from August 2017. On a regional basis the Los Angeles County median price rose 6.4%, Orange County rose 6,3%, and Ventura County rose 3.1% from last August. Housing inventory levels rose 17.2% from one year ago, the fifth straight month of housing supply increases. The unsold inventory index in August was a 3.3 month supply of homes listed for sale, up from 2.9 months in August 2017.

U.S. existing home sales:

The National Association of Realtors reported that total existing home sales equaled 5.34 million on a seasonally annualized rate, down 1.5% from August 2017. The nation wide median price grew 4.6% in August compared to one year ago marking the 78th straight month of year over year increases in the median price. Total housing inventory also increased. There was a 4.3 month supply of active listings in August, up from a 4.1 month supply in August 2017.

Have a great week!

-Syd

About Rodeo Realty

Rodeo Realty is a residential real estate firm that has more than 1,200 licensed agents and brokers and 12 offices throughout Los Angeles and Ventura counties.

Rodeo Realty services various markets in Southern California, including luxury real estate markets. The company’s celebrity and other multi-million dollar listings are regularly featured in the news through several television networks, online sites and publications.

Operated under the direction and vision of a single owner, Rodeo Realty stands today as one of the largest independent real estate companies in the nation, while still maintaining the friendly approach of the neighborhood REALTOR®.

As one of the largest independent real estate brokerage headquartered in Beverly Hills and operating throughout the Los Angeles area Rodeo Realty has the resources to provide the best tools in the industry to deliver the very best results.

Tag: housing

2018 Year End Economic Update