Stock markets extend streak of record highs – Stock markets closed the week higher for the 5th straight week. About 2/3 of companies that have reported earnings have beat estimates, which has helped fuel the rally. International stocks have also rose as Europe and Asia have seen an improvement in their economies, which were sluggish last year. European manufacturing data also beat expectations. The Dow Jones Industrial Average closed the week at 20,821.76, another record high and up from last week’s close of 20,624.05. The S&P 500 ended the week at 2,367.34, up from its close of 2,351.16 last week. The NASDAQ closed the week at 5,845.31, up from last week’s close of 5,838.58.
U.S. Treasury Bond yields drop this week – The 10-year U.S. Treasury Bond closed the week yielding 2.31%, down from 2.42% last Friday. The 30-year Treasury Bond yield closed the week at 2.95%, down from 3.03% last week. Mortgage rates follow bond yields, so we watch treasury bonds closely.
Mortgage rates hold steady – The Freddie Mac Primary Mortgage Survey released on February 23, j2017 reported that average mortgage rates from lenders surveyed for the most popular mortgage products were as follows: The 30-year fixed rate average was 4.16%. The 15-year fixed average rate was 3.37%. The 5/1 ARM average rate was 3.16%.
U.S. Home sales jump in January – The National Association of Realtors reported that January 2017 home sales increased to the fastest pace in almost a decade. Closed escrows increased 3.3% in January from December, and were 3.8% higher than last January’s number. The nationwide median price also increased, up 7.1% from January 2016.
U.S. Existing home sales numbers up in January – The National Association of Realtors reported that sales of existing homes nationally increased 3.3% from the number of closed sales last January. 2016 marked a decade high number of sales, so any increase is very positive. Numbers used are closed re-sales of detached single family homes, condominiums, town homes, and co-ops. The median price paid for a home in the United States increased 7.1% from last January. January was the 59th consecutive month of year over year gains in prices. The number of homes for sale in January declined 7.1% from the number of homes on the market last January. That marked the 20th straight month of year over year declines in inventory levels.
Pending sales decline slightly in California, yet increase in Southern California – The California Association of Realtors reported that sales for homes reported to MLS systems throughout the state declined 9.2% month over month from December. Statewide pending sales slowed just 0.2% from last January, but we have been seeing large year over year increases for many months as the number of sales has been increasing. Fortunately, Southern California was the only region that showed an increase in contract signings. Pending sales in Southern California rose 8.1% from last January and were 10.5% higher than last month. The Los Angeles region posted a 7.1% year over year increase. We watch pending sales closely because it’s an indicator of future closed sales. Some at CAR felt that the lower statewide numbers indicate some softening. I feel exactly the opposite. I’m surprised to see the numbers as strong as they are given the amount of rain we had in January. Most states are far more seasonal than California because of weather. Look at Washington! We don’t see a lot of rain here which makes our market much less seasonal and more consistent than most of he country. I’m thinking that if this many people are out buying in the rain we better “fasten our seat belts” because it looks like we are in for a fantastic year!