Economic update for the week ending May 20, 2017

Stocks end the week just slightly down despite volatility – Stocks rose early in the week as oil prices rebounded after OPEC and non OPEC members announced plans to slow production. More disappointing earnings particularly from retailers were released. Political uncertainty was blamed on a steep drop on Thursday, but markets made up most of those losses on Friday. The Dow Jones Industrial Average ended the week at 20,804.84, down from 20,896.71 last week. The S&P 500 closed the week at 2,381.73, down slightly from its close last week of 2,390.90. The NASDAQ closed the week at 6,083.79, down from last week’s close of 6,121.23. 
Treasury Bond yields drop this week – The 10-year Treasury bond closed the week at 2.23%, down from 2.33% last week. The 30-year treasury yield ended the week at 2.90%, down from 2.98% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully. 
Mortgage Rates down this week – The May 18, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 4.02%, down from 4.05% last week. The 15-year fixed was 3.27%, down from last week’s 3.29% The 5-year ARM was 3.13%, down slightly from 3.14% last week. Rates dropped late in the week, so next week’s rates should be a little lower. 
The number of existing homes sold in California decline in April – Prices continue to rise – The California Association of Realtors reported that existing home sales statewide declined 2.4% in April from March to a seasonally adjusted rate of 406,300 in April. That was 1.7% below the sales rate last April. The Southern California region had the largest decline. The number of sales were down 6.5% from April 2016. The decline in sales was attributed to a historically low number of homes for sale. Statewide there was a 3.5-month supply of homes for sale in April. That was the lowest April reading since C.A.R. has been tracking their Unsold Inventory Index. New listings taken statewide have declined for 22 straight months, falling 10.5% from last April. Prices continue to move up. The statewide median price was $536,750. It increased 3.7% from March’s median price of $517,490. Year over year the median price increased 5.4% from $509,240 in April 2016. 
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Author,
Syd Leibovitch