Economic update for the week ending December 21, 2019
Stock markets closed the week at record highs - Stock markets closed Friday with their 31st record high in 2019. After last week’s announced preliminary trade deal with China, a trade deal with Canada and Mexico passing in Congress, increased economic growth in Asia, signs of a Brexit deal, increased retail sales, strong consumer confidence, and solid U.S. corporate profits investors are ending year with great confidence. Not even the impeachment of a U.S President for only the third time in history could dampen investor confidence. The Dow Jones Industrial Average closed the week at 28,455.09, up 1.1% from 28,135.28 last week. It is up 22% year to date. The S&P 500 closed the week at 3,221.22, up 1.7% from 3,168.80 last week. It is up 28.5% year to date. The NASDAQ closed the week at 8,924.97, up 2.2%, from 8,734.88 last week. The NASDAQ is up 34.5% year to date.
U.S. treasury bond yields higher this week - The 10-year treasury bond closed the week yielding 1.92%, up from 1.82% last week. The 30-year treasury bond yield ended the week at 2.34%, up from 2.26% last week. We watch treasury bond yields because mortgage rates often follow bond yields.
Mortgage rates unchanged this week - The December 19, 2019 Freddie Mac Primary Mortgage Survey reported mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate average was 3.73%, unchanged from 3.73% last week. The 15-year fixed was 3.19%, unchanged from 3.19% last week. The 5-year ARM was 3.37%, almost unchanged from 3.36% last week. Unfortunately, rates rose late in the week. They will be a little higher next week.
December California existing home sales report - The California Association of Realtors reported that state-wide existing single family home sales totaled 402,880 on a seasonally adjusted annualized rate in November, up 5.6% from the number of homes sold last November. The statewide median price was $589,770, down 2.6% from October, but up 6.4% from November 2018. The unsold inventory level, the measurement of how long it would take to sell all active listings at the current sales rate, stood at a 3.1 month supply in November, down from a 3.7 month supply one year ago. On a regional level sales were as follows: Los Angeles County had a 5.9% increase in the number of sales compared to one year ago. The median sales price was $594,840, up 7.4% from $553,940 last November. There was a 2.9 month supply of housing, down from 3.9 months one year ago. Ventura County had a 1.9% decrease in the number of sales from one year ago. The median sales price was $660,000, up 2.5% from $643,740 last November. The supply of housing for sale was 4.4 months, down from 5.4 months last November. Orange County had an increase of 6.9% in the number of sales from one year ago. The median sales price was $822,000, up 3.4% from $795,000 last November. The supply of housing for sale was 3.1 months, down from 3.9 months last November.
December U.S. existing home sales report - The National Association of Realtors reported that the number of total existing home sales increased 2.7% in November from the number of homes sold last November. The nation-wide median price increased 5.4%, from November 2018. The supply of housing stood at a 3.7 month supply, down from 4 months last November.