Stock markets ended the week lower - Investors took profits as stocks dropped from last week’s record high levels. Analysts have mixed expectations as they await the start of second quarter earnings results. Those should drive the markets in the coming weeks. The Dow Jones Industrial Average closed the week at 27,154.20, down 0.7% from 27,332.03 last week. It’s up 16.4% year to date. The S&P 500 closed the week at 2,976.61, down 1.2% from 3,013.77 last week. It is up 18.7% year to date. The NASDAQ closed the week at 8,146.49, down 1.2% from 8,244.17 last week. The NASDAQ is up 22.8% year to date.
Treasury Bond Yields - Bond yields dropped this week. The 10-year treasury bond closed the week yielding 2.05%, down from 2.12% last week. The 30-year treasury bond yield ended the week at 2.57%, down from 2.64% last week. We watch treasury bond yields because mortgage rates often follow bond yields.
Mortgage rates slightly higher this week - The July 18, 2019 Freddie Mac Primary Mortgage Survey showed mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate average was 3.81%, up slightly from 3.75% last week. The 15-year fixed was 3.23%, unchanged from 3.22% last week. The 5-year ARM was 3.48%, almost unchanged from 3.46% last week.
June California existing home sales report - The California Association of Realtors reported that existing single family homes sales totaled 389,690 on a seasonally adjusted annualized rate in June. That represented a drop of 4.2% from May and a year over year drop of 5.1% from last June. The statewide median price was $611,420, up 1.4% from June 2018. The unsold inventory index stood at a 3.4 month supply of homes for sale in June, up from a 3.2 month supply in May and a 3.0 months supply one year ago. Year over year results on a regional basis in June were as follows: In Los Angeles County the median price increased 2.2%, as the number of sales fell 12.6%. In Orange County the median price increased .8% as the number of sales fell 7.2%. In Ventura County the median price dropped 4.1%, as the number of sales increased 0.6%.
Foreign investment in U.S. residential real estate declined in the year ending March 31,2019. The National Association of Realtors reported that foreign buyers purchased $77.9 billion worth of existing homes from April 2018 to March 2019. That represented a 36% decline from $121 billion from the same time period one year earlier. NAR President, John Smaby stated “Even though the numbers were lower this year than the previous 12 months, international investors and buyers still spent and invested a great deal of money in U.S. real estate.” Foreign buyers also accounted for more cash transactions. All cash transactions accounted for 41% when purchased by a foreign buyer, compared to 21% for all existing home sales within the one year time period.