Stocks mostly unchanged this week – The Dow Jones Industrial Average closed the week at 18,232.02, almost unchanged from 18,272.56 last week. The Nasdaq closed at 5,089.39, up slightly from 5,048.29 last Friday. The S&P 500 closed at 2,126.06, also about the same as last Friday’s close of 2,122.73.
Bond yields were volatile again this week – The 10 year U.S. Treasury Bond closed the week at a 2.21% yield, up from 2.14% last week. The 30 year U.S. Treasury Bond closed Friday yielding 2.99%, slightly up from 2.93% last Friday. Yields dropped Thursday after minutes from the last meeting of The Federal Reserve were released which ruled out a rate hike at the June Fed meeting. On Wednesday the 10 year closed at 2.26% and the 30 year closed at 3.06%. Fortunately they dropped on Thursday. Mortgage rates usually follow treasury bond rate trends.
Mortgage Rates – The 30 year fixed rate ended the week around 4.00% for loans up to $417,000, and around 4.25% for loans over $417,000. The 15 year fixed rate loans are about 3.25% for loans up to $417,000, and around 3.50% for loans over $417,000. The 5 Year-ARM rates are around 3.00%. 1 Year-ARM mortgages are around 2.50%. Last week’s Freddie Mac Primary Mortgage Survey showed rates as follows: 30 year fixed rates at 3.84%. 15 year fixed at 3.05%. 5/1 YR ARM at 2.88% and 1 YR ARM at 2.51%.
Inflation report shows prices rising – The labor Department said on Friday that its Consumer Price Index (CPI) rose 0.1% last month. The core inflation figure which discounts food and energy costs were up 0.3%, its largest gain since January 2013. Experts still feel that this is really not a number that would show a strong economy.
Housing Starts rise 20% in April – The Commerce Department reported Tuesday that privately owned housing starts increased in April 20.2% from March. The level was the highest since November 2007. Building permits which is a good gage of future construction also increased 10.1% from March to the highest level since June 2008.
So Cal home prices continue to rise Home inventory level dropping – CoreLogic / DataQuick released its Sothern California Home Resale Activity Report for April which showed that the median price in their six county Los Angeles metropolitan area climbed 6.2% from last April. The report also showed that the number of sales in the six county area increased 8.5% from last April. One cause for concern in the report was that there is only a 3.6 month supply of homes. This could cause the number of sales to drop in coming months, and lead to higher prices.
Nationwide home prices up – The National Association of Realtors reported that the median price paid for a home in the U.S. in April rose 8.9% compared to one year ago. April marked the 38th consecutive month of year over year home price gains. On the negative side the number of sales dropped 3.3%. This is a sign that tighter home inventory levels are resulting in fewer sales.
California’s housing market shows strong results – The California Association of Realtors reported that sales of existing homes in California rose in April. The number of homes sold in California rose 9.2% from March. Year over year the number of sales were 9.3% higher than last April. It was the largest year over year sales gain since May 2012. The median price paid for a home in California was up 2.8% from March and 7.4% from last April. Home inventory levels continued to drop. There was only a 3.5 month supply of homes for sale in April, compared a 3.8 month supply in March.
California’s Jobless rate falls to 6.3% – The California Employment Development Department reported that California employers added 28,500 non-farm payroll jobs in April. Although this was lower than the 40,500 jobs added in March unemployment reached its lowest level in April since 2008.