Economic update for the week ending October 19, 2019
Stock markets - Stocks rose early in the week as banks and investment firms reported third quarter earnings that beat analysts expectations. A weaker than expected retail sales report showed that consumers may be losing some confidence in the economy. Lastly, Boeing and Johnston and Johnston dragged down markets Friday on news of scandals showing they were aware of issues and didn’t report them. The Dow Jones Industrial Average closed the week at 26,770.20, down 0.2% from 26,816.59 last week. It is up 14.8% year to date. The S&P 500 closed the week at 2,986.20, up 0.5% from 2,970.27 last week. It is up 19.1% year to date. The NASDAQ closed the week at 8,089.54, up 0.4% from 8,057.04 last week. The NASDAQ is up 21.9% year to date.
U.S. treasury bond yields - The 10-year treasury bond closed the week yielding 1.76%, unchanged from 1.76% last week. The 30-year treasury bond yield ended the week at 2.25%, almost unchanged from 2.22% last week. We watch treasury bond yields because mortgage rates often follow bond yields.
Mortgage rates higher this week - The October 17, 2019 Freddie Mac Primary Mortgage Survey reported mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate average was 3.69%, up from 3.57% last week. The 15-year fixed was 3.15%, up from 3.05% last week. The 5-year ARM was 3.35%, almost unchanged from 3.35% last week.
California existing home sales - The California Association of Realtors reported that existing single-family home sales totaled 404,030 in September on a seasonally adjusted annualized rate. That marked a 5.8% increase over the number of homes sold last September; however, year to date home sales are down 3.1% through the first 9 months of 2019 compared to 2018. The statewide median price was $605,680, up 4.7% from September 2018. Housing inventory levels continued to shrink. There was a 3.2 month supply of homes for sale in September, down from a 4.2 month supply one year ago. On a regional basis: Los Angeles County had a median price of $663,110, up 4.5% from September 2018. The annualized number of sales increased 9.2% from last September. Orange County had a median price of $830,000, up 0.6% from September 2018. The annualized number of sales increased 16.4% from last September. Ventura County had a median price of $659,250, down 2.2% from September 2018. The annualized number of sales increased 12.9% from last September.