Bond yields drop as Fed raises overnight rates – Even though the Fed increased overnight rates for the third time since December, long term rates have dropped to the lowest level in 7 months. Since the Fed’s first increase in December 2015 the Fed’s overnight rates have gone from 0% to 1%, yet the 10-year treasury bond is .15% lower than it was before that first increase. That is because inflation is so tame. The 10-year Treasury bond closed the week at 2.16%, down from 2.21%, last week. The 30-year treasury yield ended the week at 2.78%, down from 2.86% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.
Mortgage Rates down this week – The June 15, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.91%, almost unchanged from 3.89% last week. The 15-year fixed was 3.18%, almost unchanged from 3.16% last week. The 5-year ARM was 3.15%, up slightly from 3.11% last week. Long term fixed rates dropped after The Federal Reserve raised overnight rates on Wednesday so next week’s rates should be a little lower.
California jobless rate lowest since 2000 – The Employment Development Department reported that the unemployment rate in California has dropped to 4.7% in May. Los Angeles County fared even better. The unemployment rate in the county fell to 4.4%.
The California Association of Realtors and National Association of Realtors have not released May sales data yet. Those will be out and included in my report next week.