Economic update for the week ending July 29, 2017

Stock markets mixed this week – The Dow was up as corporate earnings of DOW companies are beating expectations. The Nasdaq and S&P were unchanged. The Dow Jones Industrial Average ended the week at 21,830.21, up from 21,580.07 last week. The S&P 500 closed the week at 2,472.10, unchanged from its close last week of 2,472.55. The NASDAQ closed the week at 6,374.78, almost unchanged from last week’s close of 6,387.75.  
Bond yields rise this week– The 10-year Treasury bond closed the week at 2.30%, up from 2.24% last week. The 30-year treasury yield ended the week at 2.89%, up from 2.81% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.
Mortgage Rates lower this week– The July 27, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.92%, down from 3.96% last week. The 15-year fixed was 3.20%, down from 3.23% last week. The 5-year ARM was 3.18%, down from 3.21% last week. 
U.S. existing home sales drop in June, but still higher than 2016 levels – Prices continue to rise – The National Association of Realtors reported that existing home sales, which are completed transactions that include single-family homes, town-homes, condominiums, and co-ops, decreased 1.8 percent to a seasonally adjusted annual rate of 5.52 million in June from 5.62 million in May. Despite last month’s decline, June’s sales pace is 0.7% above a year ago, but is the second lowest of 2017 (February, 5.47 million). We are still on pace for either the most sales ever in the U.S. The median pricefor an existing-home in June was up 6.5% from June 2016. June marked the 64th straight month of year-over-year price gains. Total housing inventory at the end of June declined 7.1% from last June’s level. The number of homes for sale has fallen year-over-year for 25 consecutive months. Unsold inventory is at a 4.3-month supply at the current sales pace, which is down from 4.6 months a year ago. 
New home sales rise in June – The Commerce Department reported that sales of new homes rose 0.8% in June from May’s sales levels. Year over year new home sales are a staggering 9.1% higher than the number of new home sales last June. New home sales in the west increased 12.5% to the highest number of new home sales since July 2007. 
Author, 
Syd Leibovitch