mortgage rates Archives

August 25, 2023September 1, 2023

Weekly Economic Update | Week Ending August 26, 2023

Economic news this week focused around the Fed’s annual international symposium. Central banks from around the world as well as U.S. Fed Chairman Jerome Powell reiterated their intent to do whatever it takes to bring inflation down to their 1% target. Powell pretty much stated that further increases would be necessary, as growth has exceeded expectations. He spoke about the tight labor market being a major cause of inflation. He said that we won’t reach the target at the current unemployment level, and the need to get the unemployment rate higher. It is currently at the lowest level in over 50 years. That appears to be a target that the Fed will be focusing on when they set monetary policy. The Dow Jones Industrial Average closed the week at 34,346.90 down 0.5% from34,500.66 last week. It is up 3.6% year-to-date. The S&P 500 closed the week at 4,405.71, up 0.8% from 4,369.71 last week. It is up 14.7% year-to-date. The Nasdaq closed the week at 13,590.65, up 2.3% from 13,290.78 last week. It is up 29.8% year-to-date.

U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 4.25% almost unchanged from 4.26% last week. The 30-year treasury bond yield ended the week at 4.30%, down slightly from 4.38% last week. We watch bond yields because mortgage rates follow bond yields.

Mortgage rates – The Freddie Mac Primary Mortgage Survey reported that mortgage rates for the most popular loan products as of August 24, 2023, were as follows: The 30-year fixed mortgage rate was 7.24%, up from 7.09% last week. The 15-year fixed was 6.55% up from 6.46% last week.

U.S. existing-home sales – The National Association of Realtors reported that existing-home sales totaled 4.07 million units on a seasonally adjusted annualized rate in July, down 16.6% from an annualized rate of 4.88 million in July 2022. The median price for a home in the U.S. in July was $406,700, up 1.9 from $413,800 one year ago. There was a 3.3-month supply of homes for sale in July, up from a 3.2-month supply last July. First-time buyers accounted for 30%of all sales. Investors and second-home purchases accounted for 16% of all sales. All-cash purchases accounted for 26% of all sales. Foreclosures and short sales accounted for 1% of all sales.

August 5, 2023August 7, 2023

Economic update for the week ending August 5, 2023

Stock markets dropped this week – Stocks dropped, and bond yields rose after Fitch, one of the “big three” rating agencies downgraded the U.S. debt rating from AAA to AA+. That marked only the second downgrade of U.S. credit in history. Fitch cited political infighting and debt concerns. While that was mostly ignored by stock market investors, U.S. Treasury bond investors paid attention and bond yields rose to the highest levels of the year. Friday’s release of the July jobs report was a mixed bag. While new job gains moderated, the unemployment rate dropped to 3.5%, that’s near a 60-year low. The Dow Jones Industrial Average closed the week at 35,065.62, down 1.2% from 35,459.29 last week. It is up 5.8% year-to-date. The S&P 500 closed the week at 4,478.03, down 2.3% from 4,582.23 last week. It is up 16.6% year-to-date. The Nasdaq closed the week at 13,909.24, down 2.8% from 14,316.66 last week. It is up 32.9% year-to-date in our weekly economic update.

U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 4.05%, up from 3.96% last week. The 30-year treasury bond yield ended the week at 4.21%, up from 4.03% last week. We watch bond yields because mortgage rates follow bond yields.

Mortgage rates – The Freddie Mac Primary Mortgage Survey reported that mortgage rates for the most popular loan products as of August 3, 2023, were as follows: The 30-year fixed mortgage rate was 6.90%, up from 6.81% last week. The 15-year fixed was 6.25%, up from 6.11% last week.

To conclude our weekly economic update, Job growth slowed and unemployment dropped to near a 60-year low in July – The Department of Labor and Statistics reported that 187,000 new full-time jobs were added in July. That was below economists’ expectations of 200,000 new jobs. The unemployment rate fell to 3.5% in July, down from 3.6% in June. It’s at its lowest level in almost 60 years. Average hourly wages increased 4.4% from one year ago. The labor-force participation rate (the share of workers with a job or actively looking for a job) remained at 62.6% for the fifth consecutive month. It was 63.4% level before the pandemic.

November 4, 2018November 4, 2018

Economic update for the month ending October 31, 2018

U.S. Employers added 250,000 new jobs in October:

Wages grow at fastest pace in almost 10 years – Unemployment remains at lowest rate since 1969 – The Department of Labor Statistics reported Friday that 250,000 new jobs were added in October. That eclipsed the 190,000 new jobs analysts had expected. Job growth has now hit a record of 97 straight months. The unemployment rate was unchanged at 3.7%, the lowest national unemployment rate in 49 years. Average hourly wages were up 3.1% in October from last October. That was the largest year over gain in almost 10 years.

California employers added 13,200 new jobs in September :

The California Employment Development Department reported that 13,200 new jobs were added in September. California has now added an average of 29,400 new jobs a month for 103 consecutive months. The state’s unemployment rate dropped to 4.1%, the lowest rate on record.

U.S. stocks saw their largest monthly loss in 10 years in October:

Although most companies reported quarterly profits that beat or were in line with expectations, the few like Amazon, Square, Hasbro, Domingo’s and others that reported disappointing results scared investors. The Dow Jones Industrial Average closed the month at 25,115.76, down from 26,458.31. last month. The S&P 500 closed the month at 2,711.74, down from 2,913.98 on September 30. The NASDAQ closed the month at 7,305.90, down from 8,046.35 last month.

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 October:

The November 1, 2018 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 4.83%, up from 4.72% on September 27, 2018. The 15-year fixed was 4.23%, up from 4.16% on September 27. The 5-year ARM was 4.04%, up from 3.97% at the end of September.

GDP up 3.5% in third quarter:

The U.S. Bureau of Economic Analysis announced that the first reading of the nation’s gross domestic product (GDP) rose by 3.5% in the third quarter of 2018. That beat expectations of a 3.4% rise, but was well below the 4.2% increase registered in the second quarter of 2018. The report also said that The PCE price index, a key indicator of inflation, rose at a 1.6% annual rate in the quarter. That was well below the 2.2% annual increase analysts forecasted. Consumer spending, which accounts for about two thirds of the U.S. economy grew by 4% in the third quarter. That marked the largest increase since the fourth quarter of 2014.

September Nationwide Existing Home Sales:

Data released this week from The National Association of Realtors showed that total existing home sales fell again in September. The number of existing homes sold in September fell 3.4% from August, and are down 4.1% from one year ago. The median price paid for a home in The U.S. was up 4.2% from last September. That marked the 79th straight month of year over increases. The unsold inventory index is at a 4.4 month supply, up slightly form a 4.2 month supply one year ago.

September California Existing Home Sales:

The California Association of Realtors reported that existing single family home sales totaled 382,550 in September on a seasonally adjusted annualized rate. That was down 4.3% from August and down a staggering 12.4% from last September, when sales totaled 436,920 on a seasonally adjusted annualized rate. The median price paid for a home in California was $587,850, up 4.2% from September 2017.On a more regional level the median price increased 4.7% in Los Angeles County, 10.6% in Ventura County, and 3.3% in Orange County from one year ago. Inventory levels continued to rise after hitting historic lows in 2017. The unsold inventory index in California stood at a 4.2 month supply in September, up from a 3.3 month supply in September 2017. Inventory levels have now increased for 6 straight months and are up 20.4% from one year ago. Listings are at the highest level in 31 months. Los Angeles County has a 4.4 month supply, up from a 3.1 month supply last September. Orange County has a 4.3 month supply, up from 3.1 months last September. Ventura County had a 6.3 month supply of homes, up from a 4.7 month supply one year ago.

Best,

Syd Leibovitch

Rodeo Realty Inc.

9171 Wilshire Blvd. Suite 321

Beverly Hills, California 90210

CA DRE # 00858724