Stocks lost ground this week – Stock markets finished the week lower this week for just the third weekly loss of the year. The Fed issued comments this week announcing that they had put interest rate hikes on hold for the remainder of 2019, citing low inflation numbers and increased risk of slowing to the economy due to global pressures. This led investors to fear that The Fed knows something investors don’t and they became more cautious. Bond yields surged which drove down mortgage rates. The Dow Jones Industrial Average closed the week at 25,502.32, down 1.3% from 25,848.87 last week. It’s up 9.3% year to date. The S&P 500 closed the week at 2,800.71, down 0.8% from 2,822.48 last week. It is up 11.7% year to date. The NASDAQ closed the week at 7,642.67, down 0.6% from 7,688.53 last week. The NASDAQ is up 15.2% year to date.
Treasury Bond Yields drop to the lowest levels since 2017 - The 10-year treasury bond closed the week yielding 2.44%, down from 2.59% last week. The 30-year treasury bond yield ended the week at 2.88%, down from 3.02% last week. We watch treasury bond yields because mortgage rates follow bond yields.
30-year Mortgage rates dropped to 4% this week - The March 21, 2019 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 4.28%, down from 4.31% last week. The 15-year fixed was 3.71%, down from 3.76% last week. The 5-year ARM was 3.84%, unchanged from 3.84% last week. Interest rates dropped on Thursday and Friday after the Freddie Mac survey was released. By the end of the day Friday we had clients locked into 30-year fixed rates below 4%!
California existing home sales rebound in February - The California Association of Realtors released their data for February home sales. Closed escrows on existing homes rebounded from January's 10-year low level of 358,470 units, and increased 11.3% to 399,080 units on a seasonally adjusted annualized basis in February. That marked a 5.6% year over drop from 422,910 closings last February. The median price for a home in California was $534,140 up 2.2% year over year from $522,440 last February. The median price is the point at which 1/2 the homes sell for more and 1/2 sell for less. Inventory levels have risen for the 11th consecutive month after dropping for three straight years to historic lows. There was a 4.6-month supply of homes for sale in February, up from a 3.6 month supply in February 2018.
U.S. existing home sales surged 11.8% in February - The National Association of Realtors announced that the number of sales of single family homes, condominiums, townhomes, and coops increased 11.8% from January to a seasonally adjusted annual rate of 5.51 million in February. Year over year sales were down 1.8% from February 2018. The median price paid for a home nationwide was up 3.2% from last February. That marked the 84th straight month of year over year increases in the median price. Theinventory level was was at a 3.5 month supply at the current sales level. That was just barely higher than a 3.6 month supply in February 2018.