Stocks drop 6% in the worst week since January 2016 – U.S. stock markets fell 6% this week as investors feared that new tarriffs on imports could start a global trade war. The Federal Reserve also raised their benchmark interest rates. This was expected just a few weeks ago, but many experts felt the Fed would hold off on an increase because stocks have been so volatile in the last couple of weeks. Stocks have dropped 10% in just a month. The Dow Jones Industrial Average closed the week at 23,533.20, down from last week’s close of 24,946.51. It is down 4.8% year-to-date. The S&P 500 closed the week at 2,588.26, down from 2,752.01 last week. It’s down 3.2% year-to-date. The NASDAQ closed at 6,992.67, down from 7,484.99 last week. It is up 1.3% year-to-date.
Treasury Bond Yields – Bond yields lower this week – The 10-year treasury bond closed the week yielding 2.82%, down from 2.85% last week. The 30-year treasury bond yield ended the week at 3.06%, down from 3.08% last week. We watch bond rates because mortgage rates follow bond rates.
Mortgage Rates stable this week – The March 22, 2018 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 4.45%, unchanged from last week’s 4.44%. The 15-year fixed was 3.91%, unchanged from 3.90% last week. The 5-year ARM was 3.68%, unchanged from 3.67% last week.
California existing home sales pick up in February – The California Association of Realtors announced that existing home sales totaled 422,910 on a seasonally adjusted annualized rate in February. That represented a 3.3% increase from the number of sales in January, and a 5.4% increase from last February’s number of sales. Prices also increased with the statewide median price $522,440, an increase of 8.8% from one year ago. After hitting a 14 year low in December, the number of homes for sale increased for a second straight month. The unsold inventory index rose to a 3.9 month supply of homes in February, up from a 3.6 month supply in January. There was a 4 month supply of homes for sale in February 2017.