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Economic update for the week ending December 12, 2020 Stock markets closed lower this week after three weeks of gains - Stocks dropped slightly as new unemployment claims surged for a second week. This was a result of layoffs due to increased shutdowns of non-essential businesses throughout the country. Markets held up well considering the exponential spread of new COVID-19 cases, because the FDA moved toward approval of the Pfizer COVID-19 vaccine. It’s the first of several... vaccines to be approved. Experts report that vaccinations will start as early as Monday. A long-awaited COVID-19 relief bill failed to materialize again this week. It was reported that a deal was going to be approved on Monday, but fell apart later in the week as the sides could not agree on key issues. An emergency stop-gap one-week spending bill to fund the government averted a shutdown for a week. Hopefully, a COVID-19 relief bill will be attached to a more permanent government funding bill. The Dow Jones Industrial Average closed the week at 30,046.37, down 0.6% from 30,218.26 last week. It’s up 5.4% year-to-date. The S&P 500 closed the week at 3,663.46, down 0.1% from 3,699.12 last week. It is up 14.8% year-to-date. The NASDAQ closed the week at 12,377.87, down 0.7% from 12,464.23 last week. It’s up 38.2% year-to-date. U.S. Treasury bond yields - The 10-year treasury bond closed the week yielding 0.90%, down from 0.97% last week. The 30-year treasury bond yield ended the week at 1.63%, down from 1.73% last week. We watch bond yields because mortgage rates often follow treasury bond yields. Mortgage rates - The December 10, 2020, Freddie Mac Primary Mortgage Survey reported mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate average was 2.71%, unchanged from 2.71% last week. The 15-year fixed was 2.26%, unchanged from 2.26% last week. The 5-year ARM was 2.79%, down from 2.86% last week. November home sale figures will be released next week. CAR will be reporting that November home sales rose above 500,000 units on an adjusted annualized rate for the first time in 11 years! It’s the highest number of sales in November ever and will represent a year over the increase of approximately 20% of the number of homes sold last November. Prices will also show an increase of nearly 20% year over year. Price increases in the last quarter added over $1 trillion in home equity. Showings last week also increased. They were 170% above the number of showings for the same period one year ago. It is surprising to see such results in the middle of a pandemic! Have a great weekend!

Economic update for the week ending November 14, 2020 Stock markets - Stocks advanced further this week after the announcement that Pfizer’s COVID-19 vaccine had proven to be 90% effective. By week’s end other vaccine manufactures also reported that they were experiencing similar results. The Trump administration announced that the vaccine will be available to the most vulnerable by the end of the year. Despite COVID-19 cases spiking in across the country, and Europe, the thr...eat of stay at homes orders in some states, anticipation of a vaccine kept investors optimistic. The Dow Jones Industrial Average closed the week at 29,471.81, up 4.1% from 28,343.40 last week. It’s up 3.3% year-to-date. (The all-time record high for the DOW was 29,553 on 12, 2020.) The S&P 500 closed the week at 3,585.15, up 2.2% from 3,509.44 last week. This is a all-time record close. It’s up 11% year-to-date. The NASDAQ closed the week at 11,829.28, down 0.6% from 11,895.23 last week. It’s up 31.8% year-to-date. U.S. Treasury bond yields - The 10-year treasury bond closed the week yielding 0.89%, up from 0.83% last week. The 30-year treasury bond yield ended the week at 1.65%, up from 1.60% last week. We watch bond yields because mortgage rates often follow treasury bond yields. Mortgage rates - The November 12, 2020, Freddie Mac Primary Mortgage Survey reported mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate average was 2.84%, up from 2.78% last week. The 15-year fixed was 2.34%, almost unchanged from 2.32% last week. The 5-year ARM was 3.11%, up from 2.89% last week (this is not a popular product and not many lenders are offering it). California third quarter home affordability report - Every quarter the California Association of Realtors issues a housing affordability report. They have reported that a surge in home prices made homes less affordable in the third quarter of 2020. They reported that 28% of California households could afford to purchase a $693,680 median priced home in the third quarter of 2020. That brought home affordability down from 33% in the second quarter. It was 31% one year ago. A minimum annual income of $127,200 was needed to qualify for a monthly payment of $3,180. The California Association of Realtors always uses the same formula to remain consistent. It is the principal, interest, property tax and insurance payment on a 30-year fixed rate mortgage with 20% down. The average interest rate in the third quarter was 3.15%. Condominiums and townhomes were more affordable. They found that 42% of California households were able to purchase a $512,000 median priced condo or townhome. An annual income of $94,000 was needed to qualify for the monthly payment of $2,350. Rates were lower at the end of the quarter, but prices were higher. It will be interesting to see what the fourth quarter figures are. Have a great weekend!

Economic update for the week ending October 3, 2020 The Dow Jones Industrial Average closed the week at 27,682.71, up 1.9% from 27,173.96 last week. It’s down 3.0% year-to-date. The S&P 500 closed the week at 3,348.44, up 1.5% from 3,298.96 last week. It’s up 3.6% year-to-date. The NASDAQ closed the week at 11,075.02, up 1.5% from 10,913.56 last week. It’s up 23.4% year-to-date. U.S. Treasury bond yields - The 10-year treasury bond closed the week yielding 0.70%, up slight...ly from 0.66% last week. The 30-year treasury bond yield ended the week at 1.48%, up from 1.40% last week. Mortgage rates - The October 1, 2020 Freddie Mac Primary Mortgage Survey reported mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate average was 2.88%, down slightly from 2.90% last week. The 15-year fixed was 2.36%, down from 2.40% last week. The 5-year ARM was 2.90%, unchanged from 2.90% last week. The U.S. economy added 661,000 jobs in September - The Department of Labor Statistics reported that employers added 661,000 jobs in September. Analysts expected 800,000 new jobs, so this number was quite a bit below expectations. This represented a slowing in the pace of the jobs recovery, as over 1.3 million jobs were added in August. The unemployment rate dropped to 7.9% in September. It was 8.4% in August. Have a great weekend!

Economic update for the week ending September 26, 2020 Stocks were down for a seventh straight week - The Dow and S&P closed lower again this week. Major contributors to the drop in stocks this week were: New Coronavirus cases increased both in the U.S. and Europe. Hopes of a new round of stimulus once thought to be done deal has faded. It is feared that no stimulus package will be approved before the election. Trade tensions with China appear to be escalating. First time u...nemployment claims increased unexpectedly last week. The Dow Jones Industrial Average closed the week at 27,173.96, down 1.7% from 27,657.42 last week. It’s down 4.8% year-to-date. The S&P 500 closed the week at 3,298.96, down 0.6% from 3,319.47 last week. It’s up 2.1% year-to-date. The NASDAQ closed the week at 10,913.56, up 1.1% from 10,893.28 last week. It’s up 21.6% year-to-date. U.S. Treasury bond yields - The 10-year treasury bond closed the week yielding 0.66%, down slightly from 0.70% last week. The 30-year treasury bond yield ended the week at 1.40% down from 1.45% last week. Mortgage rates - The September 24, 2020, Freddie Mac Primary Mortgage Survey reported mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate average was 2.90%, unchanged from 2.87% last week. The 15-year fixed was 2.40%, unchanged from 2.37% last week. The 5-year ARM was 2.90%, down from 2.96% last week. U.S. existing-home sales and prices soared in August - The National Association of Realtors reported that U.S. existing-home sales hit 6 million in August on a seasonally adjusted yearly basis. The number of homes sold in August was 10.5% higher than August 2019. That marked the highest number of homes sold in a month since December 2006. Prices also surged. Nationally the median price paid for a home jumped 11.4% from one year ago.

Here is a sneak peak of August home sales: 465,400 sales on an annualized basis is the highest number of sales in a month ever recorded!! Also a 14.5% year over year increase in the median price is the largest increase ever as well. We do live in interesting times!

Economic update for the month ending August 31, 2020 August marks record stock prices - The S&P 500 and the NASDAQ hit record high levels in August. Strong second quarter corporate earnings, combined with pre-pandemic retail sales data, a historically high number of home sales, and advances in COVID-19 vaccine trial results, caused stock markets to surge in August. The Dow Jones Industrial Average closed the month at 28,430.05, up 7.6% from 26,428.32 last month. The S&P 500...Continue reading