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Economic update for the week ending September 30, 2017

Markets close the week again at record highs – Stock market indexes closed the week at record levels. Stocks have soared as investors were encouraged by the prospects of lower corporate tax rates. The White House released its proposed tax plan, which would cut the corporate tax rates from 35% to 20%. Oil also rose to just over $51 per barrel which bolstered energy stocks. The Dow Jones Industrial Average ended the week at 22,405.09, up from 22,349.59 last week. It’s up 13.4% year-to-date. The S&P 500 closed the week at 2,519.36, up from its close last week of 2,502.22. The S&P is up 12.5% YTD. The NASDAQ closed the week at 6,495.96, a record high, up from its last week’s close of 6,426.22. It’s up 20.7% year-to-date. 

Bond yields higher this week – The 10-year Treasury bond closed the week at 2.33, up from 2.26% last week. The 30-year treasury yield ended the week at 2.86%, up from 2.80% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.

Mortgage Rates unchanged this week – The September 28, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.83%, unchanged from 3.83% last week. The 15-year fixed was 3.13%, unchanged from 3.13% last week. The 5-year ARM was 3.20%, up from 3.17% last week. 

Economic update for the week ending September 23, 2017

Stocks hit record highs again this week – Stocks were slightly higher this week following large gains the previous week. The Federal Reserve announced that it would begin its balance sheet normalization program next month. They will slowly sell off bonds and mortgage securities they purchased during the recession to help the housing market, lower long term rates, and add liquidity to the economy. They also announced that they would keep the federal funds rate between 1% and 1.25%, which was good news to investors. They said that while the labor market’s strong inflation is below 2%, which is lower than the Fed target rate. The Dow Jones Industrial Average ended the week at 22,349.59, up from 22,268.34 last week. It’s up 13.1% year-to-date. The S&P 500 closed the week at 2,50.22, up from its close last week of 2,500.23. The S&P is up 11.8% YTD. The NASDAQ closed the week at 6,426.22, down slightly from its all time high at last week’s close of 6,448.37. It’s up 19.4% year-to-date.
Bond yields higher this week – The 10-year Treasury bond closed the week at 2.26%, up from 2.20% last week. The 30-year treasury yield ended the week at 2.80%, up from 2.77% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.
Mortgage Rates rise this week – The September 21, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.83%, up from 3.78% last week. The 15-year fixed was 3.13%, up from 3.08% last week. The 5-year ARM was 3.17%, up from 3.13% last week. Rates were a little higher at the end of the week so next week’s survey rates could be higher.
California home sales and prices continue to rise in August – The California Association of Realtors released its August Sales and Price Report. Despite tight inventory existing, single family home sales totaled 427,630 in August on a seasonally adjusted annualized rate. That represented a 1.5% increase month-over-month from July and a 1.3% increase from last August. The Los Angeles region registered a 4.4% gain in the number of sales year-over-year. The median price paid for a home in California was $565,330, up 2.9% from July and 7.2% from August 2016. C.A.R.’s Unsold Inventory Index fell to a 2.9 month supply of housing in August, down from 3.2 months in July, as there were too few new listings to keep up with strong sales growth.

Economic update for the week ending September 16, 2017


Stock market indexes hit record highs – Markets closed the week at record highs as news that an outline of a tax reform plan would be released later this month. Recent compromise on other issues had investors feeling that tax cuts or tax reform could improve prospects for growth in the coming years. The Dow Jones Industrial Average ended the week at 22,268.34, up from 21,797.79 last week. It’s up 12.7% year-to-date. The S&P 500 closed the week at 2,500.23, up from its close last week of 2,461.43. The S&P is up 11.7% YTD. The NASDAQ closed the week at 6,448.37, up from last week’s close of 6,360.19. It’s up 19.8% year-to-date. 

Bond yields higher this week – The 10-year Treasury bond closed the week at 2.20%, up from 2.06% last week. The 30-year treasury yield ended the week at 2.77%, up from 2.67% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.

Mortgage Rates unchanged last week – but higher by week’s end – The September 14, 2017 Freddie Mac Primary Mortgage Surveyreported that the 30-year fixed mortgage rate average was 3.78%, unchanged from 3.78% last week. The 15-year fixed was 3.08%, unchanged from 3.08% last week. The 5-year ARM was 3.13%, down slightly from 3.15% last week. Rates rise at the end of the week and are now slightly higher. 

Consumer Prices rise in August – The Labor Department reported that its Consumer Price Index rose 0.4 percent in August after edging up just 0.1 percent in July. August’s gain was the largest in seven months and lifted the year-on-year increase in the CPI to 1.9 percent from 1.7 percent in July. Economists had forecast the CPI rising 0.3 percent in August and climbing 1.8 percent year-on-year. Gasoline prices surged 6.8% for consumers as refineries shut down due to hurricanes. This should just be a temporary spike and added to the CPI increase. The Core CPI, which strips out volatile food and energy, increased 0.2% in August. Year-over-year Core CPI has increased 1.7%. Inflation, while a little higher in August, is still below the Fed’s target level. 

Economic update for the week ending September 9, 2017

August new jobs disappoint – The Labor Department reported that The U.S. Economy added 157,000 non-farm jobs in August. Economists had expected a gain of 180,000 new jobs. The unemployment rate grew to 4.4% from 4.3% in July. Wage growthalso stalled growing just .1% over July and up just 2.5% from last August. 

Stocks drop this week – Stock markets dropped this week following a disappointing August 2017 jobs report, and concerns about the cost of Hurricane Harvey and Hurricane Irma frightened investors. Investors were calmed by a deal to extend the debt ceiling and avoid a government shutdown for three months. The Dow Jones Industrial Average ended the week at 21,797.79, down from 21,978.56 last week. The S&P 500 closed the week at 2,461.43, down from its close last week of 2,476.55. The NASDAQ closed the week at 6,360.19, down from last week’s close of 6,435.33.   

Bond yields lower this week – Bond yields hit the lowest levels in over a year – The 10-year Treasury bond closed the week at 2.06%, down from 2.16% last week. The 30-year treasury yield ended the week at 2.67%, down from 2.76% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.

Mortgage Rates near 18 month low – The September 7, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.78%, down from 3.82% last week. The 15-year fixed was 3.08%, down from 3.12% last week. The 5-year ARM was 3.15%, almost unchanged from 3.14% last week. Rates at the end of the week were slightly lower. 

Economic update for the week ending May 6, 2017

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U.S. job growth slows - The Labor Department reported that employers added 160,000 net new jobs in April. This fell short of the  200,000 net new jobs analysts had expected. The unemployment rate held steady at 5%, an 8-year low. Retail sales lost 3,000 net jobs.  This was especially surprising after retailers' adding 39,000 net new jobs in March, and 157,000 in the first quarter of 2016. Construction added just 1,000 net new jobs after adding 41,000 last month. Those two sectors alone account for April's decline.  The report showed that wage growth is finally beginning to show signs of improvement.  Average hourly wages ticked up 8 cents an hour, after increasing 6 cents an hour last month. Wages are up 2.5% for the past 12 months ending April 30, after remaining fairly stagnant since the recession.

Stocks lower this week - Stocks dropped for a third week in a row as renewed concerns of persistent weakness overseas made investors cautious. This followed a disappointing first quarter GDP report last week and some earnings reports that were not as robust as expected.  Stocks also dropped Thursday when ADP, the nation's largest payroll company suggested that Friday's jobs report would be disappointing. It was, yet stocks actually recovered slightly, because investors hoped that it would give pause to the Federal Reserve to leave interest rates unchanged in June rather than raise them for only the second time since 2006. The Dow Jones Industrial Average closed the week at 17,740.63, down from 17,763.64 last week. The S&P 500 closed the week at 2,057.41, down from 2,065.30 last week. The NASDAQ closed Friday at 4,736.16 down from 4,775.36 last week.

Bond yields slightly lower again this week - The 10 year U.S. Treasury bond  closed Friday yielding 1.79%, slightly down from 1.83% last week. The 30 year U.S. Treasury bond closed Friday yielding 2.62%, also slightly lower than 2.66% last week. Mortgage rates follow bond yields so we watch bonds carefully. 

Mortgage rates lower this week - The Freddie Mac Primary Mortgage Survey released on May 5, 2016 showed that average mortgage rates from lenders surveyed for the most popular mortgage products were as follows: The 30-year fixed rate average was 3.61%. The 15-year fixed average rate was 2.88%. The 5/1 ARM average rate was 2.80%.


Economic update for the week ending April 30, 2017

Stocks down after two weeks of solid gains - A disappointing U.S. first quarter GDP report, and a weaker than expected consumer sentiment reading from The University of Michigan were some of the factors which drove stocks down this week. The Dow Jones Industrial Average closed the week at 17,763.64, down from 18,003.75 last week. The S&P 500 closed the week at 2,065.30, down from 2,091.58 last week. The NASDAQ closed Friday at 4,775.36, down from 4,906.23 last week.

Bond yields slightly lower - The 10 year U.S. Treasury bond closed Friday yielding 1.83%, slightly down from 1.89% last week. The 30 year U.S. Treasury bond closed Friday yielding 2.66%, also slightly lower than 2.70% last week. Mortgage rates follow bond yields so we watch bonds carefully.

Federal Reserve officials left interest rates unchanged - In a statement Wednesday after a two-day meeting, the Fed stuck to its longstanding plan to move carefully on raising the benchmark federal-funds rate. The Fed has held the federal-funds rate between 0.25% and 0.50% since December, it's first interest rate hike since 2006. The Fed dropped the rate and held it to near zero since 2008. Policy makers want to give themselves room to act at their June 14-15 gathering should they see enough encouraging developments, without signaling to investors that action is likely. Among the concerns: lingering worry over low inflation at home, slow-growing overseas economies and the potential British exit from the European Union. The Fed’s caution underscores how policy makers still lack confidence they can move away from extraordinary easy-money policies without undermining the fragile U.S. expansion and knocking the global economy off balance. Officials have already backed off the expected pace of four rate increases this year amid economic sluggishness. Policy makers on Wednesday pointed to a U.S. economy that is performing well in some respects but continuing to struggle in others. “Labor market conditions have improved further even as growth in economic activity appears to have slowed,” the statement said. It noted household spending has diminished even though real income has risen and consumer sentiment remains high.

First quarter gross domestic product disappointing - U.S. GDP posted its weakest showing since the first quarter of 2014, with an annualized growth rate of 0.5% for the first quarter of 2016. A slow first quarter has been something of a pattern in recent years, followed by a pickup in later quarters. Economists were divided over whether the details of today’s report imply a second-quarter bounce back. While the overall report was weak, housing was one sector that posted very good results. The housing sector was up 14.8%.

U.S. Pending Home Sales at one year high - The National Association of Realtors reported that the number of homes that went under contract in March reached the highest level in nearly a year. They felt this was a sign the housing market is gaining steam as Americans benefit from historically low interest rates and steady job growth. Pending sales of previously owned homes, reflecting contract signings, rose 1.4% in March from February. The pickup in pending sales is the latest sign the housing market continues to advance after posting solid growth in 2015. Pending sales in March climbed 1.4% compared with a year earlier. A more closely watched measure of the housing market is the NAR’s report on existing-home sales, which measure closed transactions. Existing-home sales—or all purchases of previously owned single-family homes, town homes, and condominiums—rose 5.1% in March from February to an annual rate of 5.33 million, the NAR reported earlier this month. Sales were up 1.5% from the prior year. Existing homes represent roughly 90% of the market.

Consumer confidence lower in April - The University of Michigan released its April consumer sentiment index. It fell to 89.0 from 91. The index is now 7.2% lower than its level one year ago. In a release the survey director, Richard Curtin stated that "the negative views of the future may be in part due to the presidential campaign." He also wrote that, "the size of the decline, while troublesome, is still far short of indicating an impending recession."

Mortgage rates slightly higher this week - The Freddie Mac Primary Mortgage Survey released on April 28, 2016 showed that average mortgage rates from lenders surveyed for the most popular mortgage products were as follows: The 30-year fixed rate average was 3.66%. The 15-year fixed average rate was 2.89%. The 5/1 ARM average rate was 2.86%.


Economic update for the week ending April 23, 2017

Stocks at yearly high - DOW tops 18,000 - Stocks were up again this week. Solid corporate first quarter earnings and firming oil prices helped the markets this week. So far the first quarter earnings season is off to a solid start. 59% of firms beat revenue expectations and 82% of firms beat earns expectations. Energy stocks rebounded as well. U.S. crude oil rose from $39 a barrel last week to $43 this ...week. U.S. crude oil hit $27 a barrel in February, so it's made a nice rebound which has energy companies, and people in areas with oil production feeling better about the economy. The Dow Jones industrial average has now gained 2,500 points since hitting its lows just two months ago. The Dow Jones Industrial Average closed the week at 18,003.75 up from 17,897.46 last week. The S&P 500 closed the week at 2,091.58, up from 2,080.73 last week. The NASDAQ closed Friday at 4,906.23, down from 4,938.72 last week.

Bond yields up this week - The 10 year U.S. Treasury bond closed Friday yielding 1.89%, up from 1.76% last week. The 30 year U.S. Treasury bond closed Friday yielding 2.70%, up from 2.56% last week. Mortgage rates follow bond yields so we watch bonds carefully. Mortgage rates will be higher next week.

Mortgage rates remain near three year low -The Freddie Mac Primary Mortgage Survey released on April 21, 2016 showed that average mortgage rates from lenders surveyed for the most popular products were as follows: The 30 year fixed average rate was 3.59%. The 15 year fixed average rate was 2.85%. The 5/1 ARM average rate was 2.81%. Rates rose at the end of the week. They will be a little higher on next week's survey.

California existing home sales and prices post best pace in six months - The California Association of Realtors reported that existing home sales totaled 415,220 in March on a seasonally adjusted annualized rate, up 5.5% from February, and 5.7% higher than last March. The statewide median price was $483,280, up 8.9% from February and up 4% from March 2015.

U.S home existing home sales show strong spring buying season has begun - The National Association of Realtors announced that existing home sales reported from member associations around the nation revealed that home sales in March were up 5.1% from February.

California unemployment rate drops in March - The state's unemployment rate dropped from 5.5% in February to 5.4% in March. It has dropped 6.8% since its peak of 12.2% in February 2010.

Economic update for the week ending April 16, 2017

Stocks up for the week - Stocks rallied on better than expected Chinese trade data which indicated that the China's economy may not be hitting the "hard landing" investors has feared. At the same time U.S. manufacturing output unexpectedly dropped in March, as factory output dropped 0.3% in March. This held back the gains. The Dow Jones Industrial Average closed the week at 17,897.46, up from 17,576.96 las...t week. The S&P 500 closed the week at 2,080.73, up from 2,047.60 last week. The NASDAQ closed Friday at 4,938.72, up from 4,850.69 last week.

Bond yields lower for the week - The 10 year U.S. Treasury bond closed Friday yielding 1.76%, almost unchanged from 1.72% last week. The 30 year U.S. Treasury bond closed Friday yielding 2.56%, unchanged from 2.55% last week. Mortgage rates follow bond yields so we watch bonds carefully.

Mortgage rates remain near three year low -The Freddie Mac Primary Mortgage Survey released on April 7, 2016 showed that average mortgage rates from lenders surveyed for the most popular products were as follows: The 30 year fixed average rate was 3.58%. The 15 year fixed average rate was 2.86%. The 5/1 ARM average rate was 2.84%.

Economic update for the week ending April 9, 2017

Stocks down for the week - This week several Fed members as well as Fed chairperson, Janet Yellen, made statements about interest rate policy. They stated that rates will rise much slower than previously expected due to more uncertainty in the economy. This helped to weaken the value of the dollar which is good for manufacturers who export goods. The weaker dollar caused oil prices to rise. Oil was up 7% for... the week with U.S. Crude closing above $39 a barrel. U.S. Crude hit a low of $27 a barrel in February, so oil prices have been on a good path to recovery. Energy stocks ended the week higher. Unfortunately, retail stocks got hit hard when Gap and several other retailers announced that same store March sales were down considerably. This and The Fed comments caused investors to wonder where the economy is heading. The Dow Jones Industrial Average closed the week at 17,576, down from 17,972.75 last week. The S&P 500 closed the week at 2,047.60, down from 2,072.78 last week. The NASDAQ closed Friday at 4,850.69, down from 4,914.54 last week.

Bond yields lower for the week - The 10 year U.S. Treasury bond closed Friday yielding 1.72%, down from 1.79% last week. The 30 year U.S. Treasury bond closed Friday yielding 2.55%, down from 2.62% last week. Mortgage rates follow bond yields so we watch bonds carefully.

Mortgage rates near three year low -The Freddie Mac Primary Mortgage Survey released on April 7, 2016 showed that average mortgage rates from lenders surveyed for the most popular products were as follows: The 30 year fixed average rate was 3.59%. The 15 year fixed average rate was 2.88%. The 5/1 ARM average rate was 2.82%.

This was a slow week for data. Next week we should start getting housing sale numbers and California March employment figures.

Economic update for the week ending April 2, 2017

Stocks higher this week - Stocks gained midweek after Fed chairwoman Janet Yellen, commented that The Fed will raise rates at a slow pace. This followed comments last week by members of the Fed's open market committee that the next rate rise could come this month. Those comments caused bond rates to rise and stocks to fall. Yellen's comments this week made investors feel rates were not raising soon which... caused rates to fall and stocks to rise. The next Fed meeting is April 26 - 27. It will be interesting to see what comes out of that meeting. A strong jobs report also rallied the markets on Friday.

The Dow Jones Industrial Average closed the week at 17,972.75, up from 17,515.33 last week. The S&P 500 closed the week at 2,072.78, up from 2,035.94 last week. The NASDAQ closed Friday at 4,914.54, up from 4,773.50 last week.

Bond yields lower for the week - The 10 year U.S. Treasury bond closed Friday yielding 1.79%, down sharply from 1.91% last week. The 30 year U.S. Treasury bond closed Friday yielding 2.62%, down from 2.67% last week. Mortgage rates follow bond yields so we watch bonds carefully.

Mortgage rates -The Freddie Mac Primary Mortgage Survey released on March 31, 2016 showed that average mortgage rates from lenders surveyed for the most popular products were as follows: The 30 year fixed average rate was 3.71%. The 15 year fixed average rate was 2.98%. The 5/1 ARM average was was 2.90%.

Pending home sales rise - The National Association of Realtors announced that pending home sales rose 3.5% in February to the highest level in seven months. The California Association of Realtors released their February pending home sales report. In California pending home sales rose 26.4% from a disappointing January. Year over year pending existing home sales 0.4% below last February's levels.

Economic update for the week ending March 26, 2017

California existing home sales show mixed results in February - The California Association of Realtors reported that the number of California home sales in February was up 2.6% from January, and 6.4% above last February's levels.  The Los Angeles region showed almost identical increases as the state as a whole. Tempering the report was home prices. The statewide median price fell 4.7% in February from January and year over year the median price was up just 3.8% from last February. Inventory levels which hit record lows of a 3 month supply just a few months ago have increased.  The unsold inventory index rose to a 4.6 month supply in February as more homes have hit the market. The unsold inventory index was at a 4.9 month supply last February before edging down as sales increased in the spring. 
U.S. Existing home sales fall sharply in February - The National Association of Realtors reported that month over month total existing home sales dropped 7.1% in February.  On a positive, home sales were 2.2% higher than last February's levels.  The drop was most significant in the Northeast and Midwest which weighed down the national numbers. Weather was thought to have played a part as a massive snow storm in the east may have slowed sales.  Low inventory levels, were also to blame according to the report. 
New home sales jump in February - The Commerce Department reported that the number of sales of new homes surged 38.5% in the Western United States.  All other regions declined and the country as a whole showed new home sales up 2% in February. Obviously, strong sales here in the west pulled that number positive.


Economic update for the week ending March 19, 2017

Stocks have another strong week - Stocks gained ground for a fifth straight week.  Stock markets have now gained back all the losses suffered in the first 6 weeks of 2016. Earlier in the year stocks were pounded by falling energy stocks due to low oil prices. Those stocks have made back their losses as oil prices have rebounded. Benchmark U.S. Crude oil was $39.44 a barrel Friday, up from a 13 year low of $26 on February 11. Higher oil prices help economies in oil producing regions. Better economic conditions lead to higher spending which helps all sectors of the economy. The price of the dollar has also settled and has dropped about 10% after reaching the strongest levels in decades.  This helps the outlook of U.S. exports, as a weaker dollar makes U.S. goods cheaper overseas. Other developments have been that reports on manufacturing, hiring, and construction spending have shown that the U.S. economy is still expanding.  The Federal Reserve announced at its meeting this week that there will be fewer interest rate hikes this year than they previously expected. This also helped stocks.
The Dow Jones Industrial Average closed the week at 17,602.30, up from 17,213.31 last week. The S&P 500 closed the week at 2,049.58, up from 2,022.19 last week. The NASDAQ closed Friday at  4,795.65, up from 4,748.47 last week. 

Bond yields drop after inching up over the last few weeks - The 10 year U.S. Treasury bond  closed Friday yielding 1.88%, down from 1.98% last week. The 30 year U.S. Treasury bond closed Friday yielding 2.68%, down from 2.75% last week. Mortgage rates follow bond yields so we watch bonds carefully. 

Mortgage rates  -The Freddie Mac Primary Mortgage Survey released on March 17, 2016 showed that average mortgage were as follows: The 30 year fixed average rate was 3.73%. The15 year fixed average rate was 2.99%.  The 5/1 ARM average was was 2.93%. 

Economic update for the week ending March 12, 2017

Stocks higher for the fourth straight week - Stock markets are  now only slightly down for the year. They have made up the large losses suffered in Janurary and early February. The S&P, for example, is up 11% from its two year low on February 11.  This four-week rally has been fueled by better economic data and rising oil prices. Oil prices have risen 47% from their low point just one month ago when U.S. crude oil hit a 13 year low of $26.21 a barrel.  Oil prices and stocks have moved in the same direction every week. While low oil prices have hurt many parts of the global and local economy, consumers are benefiting.  As gasoline prices rise at the pump  it will be interesting to see what happens with retail sales which have been extremely strong,  and auto sales that are at all time record highs. These two sectors of consumer spending have been bolstered by low gasoline prices which have given consumers more disposable income. The dollar which has been extremely strong has weakened a bit over the last few weeks. That's a good sign for manufacturer's outlook on exports, as a weaker dollar makes U.S. goods less expensive to foreign currencies.  The dollar is still quite strong, but off its highs. The Dow Jones Industrial Average closed the week at 17,213.31, up from 17,006.77 last week. The S&P 500 closed the week at 2,022.19, up from 1,999.99 last week. The NASDAQ closed Friday at  4,748.47, up from 4,717.03 last week. 

Bond yields higher -  Bond yields have inched up over the last few weeks. The 10 year U.S. Treasury bond  closed Friday yielding 1.98%, up from 1.88% last week. The 30 year U.S. Treasury bond closed Friday yielding 2.75%, up from 2.70% last week. Mortgage rates follow bond yields so we watch bonds carefully. 

Mortgage rates up slightly for second week -The Freddie Mac Primary Mortgage Survey showed that average rates on March 10, 2016 were as follows: The 30 year fixed average rate was 3.68%. The15 year fixed average rate was 2.96%. The5/1 ARM average was was 2.92%. 
We should start getting February home sales data next week. Stay tuned!

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​Economic update for the week ending March 5, 2017

U.S. Employers add 242,000 jobs in February - The Labor Department reported that U.S. Employers added 242,000 new jobs in February. This was far better than the 190,000 new jobs economists surveyed had predicted. It was also viewed as a very positive sign after a disappointing 172,000 jobs added in January.  It was feared after the low January report that job growth could be stalling, but the February number of 242,0000 net new jobs put the 2016 average job gains numbers back to over 200,000 per month. The national unemployment rate held steady at 4.9%, the lowest level since February 2008. 
Wage growth was disappointing showing hourly wages up just 2.2% from last February. Wages were looking like they were beginning to rise over the last few months, after being stagnant for years, so this was a disappointing number.  The Federal Reserve has a wage growth target of 3.5%.
California Unemployment Rate drops to 5.7% in January - The Employment Development Department reported that California's unemployment rate slipped in January to 5.7%, down from 5.9% in December. Year over year non farm payrolls increased by 444,900 from last January when the state's unemployment rate was 6.8%.
Stock markets rise for third straight week - Stocks rose again this week as rising oil prices bolstered energy stocks, and the outlook of economics in oil producing regions. Oil prices have risen 30% from their February lows.  A strong jobs report showed that U.S. Employers's are still confident and expanding, which also helped stocks on Friday after the report was released.  The Dow Jones Industrial Average closed the week at 17,006.77 up from 16,391.99 last week. The S&P 500 closed the week at 1,999.99 up from 1,948.05 last week. The NASDAQ closed Friday at  4,717.02 up from 4,590.47 last week. 

Economic update for the week ending February 27, 2017

Stocks rise for the second consecutive week - Stock markets rallied Monday  as oil prices rose 7%. Unfortunately, oil prices and stocks retreated from the highs of the week. Oil prices ended the week just over $32 a barrel, up 3.2% for the week. Stocks are up about 6% from their February lows. Markets were also encouraged by an upward revision in 4th quarter GDP, and an increase in durable goods orders. The Dow Jones Industrial Average closed the week at16,639.97, up from 16,391.99 last week. The S&P 500 closed the week at 1,948.05, up from 1,917.78 last week. The NASDAQ closed Friday at  4,590.47, up from 4,505.93 last week. 

Bond yields -  The 10 year U.S. Treasury bond yield closed Friday at 1.76%, unchanged from 1.76% last week.  The 30 year U.S. Treasury bond yield closed Friday at 2.63%, also almost unchanged from2.61% last week. 
4th quarter GDP was revised higher - Investors were encouraged Friday when the government released its second revision to the 2015 4th quarter gross domestic product.  GDP was revised upward from a growth rate of 0.7% to 1%. Analysts feared that it could actually be revised downward to 0.4%, so this was a report that was met with optimism. 

Durable goods orders up 4.9% in January - A stronger than expected durable goods report in January has analysts believing that this may be pointing to the beginning of a possible turnaround in manufacturing. Manufacturing in the U.S. has been hit by a strong dollar which makes our goods more expensive overseas and goods manufactured elsewhere cheaper for U.S. consumers.  Fear of pullback on purchases of U.S. made goods caused manufacturer's to slow the pace of manufacturing. This was done to lower inventory levels so as not to get caught with an oversupply of goods. As the pace of orders rise, companies boost manufacturing and are beginning to allow inventory levels to rise from historic low levels. This is a positive sign that boosted markets.
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Economic update for the week ending February 20, 2017

Stocks end week higher - Stocks rose noticeably this week, fueled by a surge in oil prices during the week.  Oil prices rose by 10% on the announcement of a proposed coordinated production freeze between Saudi Arabia, Russia and Iran. The The Dow Jones Industrial Average closed the week at 16.391.99, up from 15,973.84 last week. The S&P 500 closed the week at 1,917.78, up from 1,864.78 last week. The NASDAQ closed Friday at  4,505.93, up from 4,337.51 last week. 

Bond yields -  The 10 year U.S. Treasury bond yield closed Friday at 1.76%, unchanged from 1.74% last week.  The 30 year U.S. Treasury bond yield closed Friday at 2.61%, unchanged from 2.60% last week. 

Mortgage rates at lowest levels in 3 years and near 50 year lows - The Freddie Mac Primary Mortgage Surveyshowed that average rates on February 18 2016 were as follows: The 30 year fixed average rate was 3.65%. The 15 year fixed average rate was 2.95%. The 5/1 ARM average was was 2.85%. 

California home sales post best January performance in 3 years - The California Association of Realtors reported that the number of existing single family homes sold in January was down 5.4% from December, yet up 8.8% from last January, a 3 year high. The median price paid for an existing single family home in California was $468,330 in January, down 4.3% from December, but up 9.2% from January 2015. Inventory levels rose from 2.8 months in December to a 4.3 month supply in January as more homes hit the market. It's not unusual for sales to be lower in January as final sales are homes that went under contract 30 to 60 days earlier.  Pending sales slow over the holiday season which makes closings lower in January. The unsold inventory index uses the current month (January) sales figures, which usually has the lowest number of final sales for the year. 

Economic update for the week ending February 13, 2017

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Stocks rally Friday to make up some of the week's losses - It was a volatile week for stocks as oil prices sunk to a 12 year low on Thursday.  This pushed stocks down all week as low oil prices hurt economies in oil producing areas, states, countries, and energy companies. On Friday oil prices jumped 11.5%, the largest one day gain since 2009.  U.S Crude oil closed Friday at $29.23, which was lower than last week but well above lows 12 year lows on Thursday. Stocks rose about 2% on Friday as oil prices improved. The The Dow Jones Industrial Average rose 313 points on Friday to close the week at 15,973.84, down from 16,204.97 last week. The S&P 500 closed the week at 1,864.78 down from 1,880.05 last week. The NASDAQ closed Friday at  4,337.51, down from 4,363.14 last week. 

Bond yields drop - Investors continued to buy bonds this week driving rates down. At one point on Thursday the 10 year bond yield dropped under 1.6%. Yields rose Friday as stocks climbed to end the week higher than Thursday, but down from last week.  The 10 year U.S. Treasury bond yield closed Friday at 1.74%, down from 1.84% last week.  The 30 year U.S. Treasury bond yield closed Friday at 2.60%, down from 2.67% last week. 

Mortgage rates at lowest levels in 3 years and near 50 year lows - The 30 year fixed rates below loan amounts of 419,000  are around 3.5%.  30 year rates for loans above 419,000 are about 3.75%. The 15 year fixed was around 2.875%. The 5 year was around 2.5%. 

Retail sales climbed 0.2% in January - January marked the third straight monthly increase in retail sales. American consumers increased spending on automobiles, clothing and online purchases to begin 2016 with strong retail sales results.

Home affordability up slightly in the fourth quarter of 2015 - The California Association of Realtors reported thatCalifornia's home affordability index improved to 30% in the fourth quarter of 2015, from 29% in the third quarter. Year over year affordability slipped from 31% in the fourth quarter of 2014. They found that home buyers needed an income of $96,640 to purchase a $483,050 statewide median priced, existing single family home. Lower rates in the fourth quarter and slightly higher wages were attributed to the rise in affordability. Rates in 2016 have dropped over 1/2% so if that trend continues and rates stay at or near current levels affordability should improve, or at least remain at the same levels, even with the escalating price gains we are seeing to start the year!

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Economic update for the week ending February 5, 2017

​Stocks sell off following U.S. jobs report - Stocks sold off on Friday following the announcement of a disappointing jobs report. The dollar also strengthened after falling earlier in the week. The strong dollar is a concern for companies that sell products overseas. Oil prices also dropped which had risen over the past two weeks. All in all not great news for investors, yet the drop over the past week was not very much. The Dow Jones Industrial Average closed Friday at 16,204.97, down from 16,466.30 last week. TheS&P 500 closed the week at 1,880.05, down from 1,940.24 last week. The NASDAQ closed Friday at 4,363.14, down from 4,613.95 last week.

Bond yields drop - The 10 year U.S. Treasury bond yield closed Friday at 1.84%, significantly lower than 1.94% last week. The 30 year U.S. Treasury bond yield closed Friday at 2.67%, down from 2.75% last week.

Mortgage rates at lowest levels in 2 years - Uncertainty has caused investors to move money into lower returning safer investments like U.S. treasury bonds and mortgage securities. At the same time central banks around the world have dropped rates. Our bond and mortgage security rates, while historically low, offer a decent return comparatively. This has continued to push rates lower. The 30 year fixed rates below loan amounts of 419,000 are around 3.625%. 30 year rates for loans above 419,000 are about 3.875%. The 15 year fixed was around 3.10%. The 5 year was around 2.625%.

The real estate market seems to be in full swing! I'm seeing more listings come out, but they are selling so quickly, if priced right, that our historically low inventory levels seem to be here to stay. That is driving prices up, yet not at the levels seen a couple of years ago. I'd expect most of the years price appreciation to occur in the next few months, and prices should level off in late summer as they did last year. Interest rates are at the lowest levels in a couple of years, which are close the lowest rates in decades. If you are buying, buy now! If you are not buying, you should! If you are going to move up, I'd do it now! If you haven't been thinking of moving up, you should!

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Economic update for the week ending January 30, 2017

Stocks rally on hope that lower rates overseas will stimulate economies abroad - While central banks around the world have dropped rates to stimulate their economies investors are becoming more optimistic that a global slowdown is likely to reverse. Japan actually lowered rates from 0% to negative rates! I guess the answer to: once you are at 0% how can you drop rates to stimulate the economy?, has been answered!  Negative rates mean banks are charged to hold money on deposit with the central bank, and paid to borrow money from the central bank. The theory is that the cheaper money is for banks the more likely they will loan it out at low rates. With negative rates it actually costs banks money not to loan it out! By making money cheaper to borrow and loosening up requirements companies borrow more.  They use this to expand and invest which stimulates the economy.  Oil also rose this week which helped energy stocks. Oil dropped to near $30 per barrel on Tuesday and rose from there to end the week just below $35 a barrel. Oil ended the week up about $4 per barrel from last Friday. As quarterly earnings have begun to be reported, most U.S. Companies that have reported earnings were above expectations. The Dow Jones Industrial Average closed Friday at 16,466.30 up from 16,093.51 last week. TheS&P 500 closed the week at 1,940.24 up from 1,906.90 last week. The NASDAQ closed Friday at  4,613.95 up from 4,591.18 last week. 
Bond yields drop -  Japan's central bank announcement that it was dropping its benchmark rate from 0% to negative rates not only boosted stocks it drove money into U.S. Bonds which drove yields down. Bond yields remained near the lowest levels which have been reached from time to time over the past few years. The 10 year U.S. Treasury bond yield closed Friday at 1.94% ,  significantly lower than 2.07% last week.  The 30 year U.S. Treasury bond yield closed Friday at 2.75%, down from 2.83% last week. 
Mortgage rates drop to lowest levels in 2 years - As central banks around the world have dropped rates our bond and mortgage security rates, while historically low,  offer a decent return comparatively. This has pushed rates lower. The 30 year fixed rates below loan amounts of 419,000  are around 3.625%. 30 year rates for loans above 419,000 are just under 4%. The 15 year fixed was around 3.10%. The 5 year was around 3%. 
I will be sending a month end summary that will detail the full month in the next couple of days. We get January jobs numbers next Friday. Stay tuned!
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Economic update for the week ending January 23, 2017

Stocks got hammered in the beginning of the week, but recovered and rallied to end week higher -  One factor that moved the markets this week was oil. As oil fell to a 13 year low hitting $26.55 a barrel on Wednesday,  stocks dropped sharply along with oil prices.  Fortunately, oil recovered and ended the week around $31 a barrel which fueled a rally in the stock markets. Stocks ended higher for the week.  Dow Jones Industrial Average closed Friday at 16,093.51,up from 15,988.08 last week. TheS&P 500 closed the week at 1,906.90, up from 1,880.30 last week. The NASDAQ closed Friday at  4,591.18, up from 4,488.82 last week. 

Bond yields just slightly higher -  Bond yields remained near the lowest levels which have been reached from time to time over the past few years. The 10 year U.S. Treasury bond yield closed Friday at 2.07%, slightly higher than 2.03% last week.  The 30 year U.S. Treasury bond yield closed Friday at 2.83%, almost unchanged from 2.81% last week. 
Mortgage rates fall fell Monday and Tuesday but rise to end the week unchanged from last week - As stocks fell sharply Monday and Tuesday money moved to more safe, yet low yielding investments like bonds and mortgages.  ByTuesday the 30 year hit 3.625%. As the stock market recovered on Thursday and Friday money moved back to stocks and rates rose. The ended the week about the same as they were last Friday. The 30 year fixed rates below loan amounts of 419,000  are around 3.75%. 30 year rates for loans above 419,000 are just around 4%. The 15 year fixed was around 3.10%. The 5 year was around 3%.

 
U.S. consumer prices dipped in December - The Labor Department reported that The U.S. Consumer Price Index fell 0.1% in December. They also reported that for all of 2015 consumer prices rose just 0.7%.  This was well below the Fed's target of a 2% inflation rate. 
Southern California home sales up in December - Core Logic reported that December closed sales were up 10%from last December in the six county Southern California region. The median price was up 7% year over year.  These figures represent resale single family homes and condominiums which are taken from public records.

January has been very active.  So far our sales are up significantly from last January. It seems like prices are rising from some of the sales I am seeing. It's not unusual to see prices rise more in the beginning of the year and flatten out later. I see that happening now. 

Economic update for the week ending January 16, 2017

Stocks continue to fall in 2016 - Stocks tumbled for a second week due to falling oil prices, the strong dollar and weakness overseas.  Oil dropped to under under $30 a barrel, a level not seen 2003.  This caused energy sector stocks to drop significantly further.  The dollar rose against all other currencies. It is at the highest level in nearly 20 years against many currencies. This also spooked investors as a strong dollar makes U.S. goods more expensive abroad.  China's Shanghai Index is down 20% and our markets have dropped about 10% so far in 2016. The Dow Jones Industrial Average closed Friday at 15,988.08, down sharply from 16,346.45 last week. The S&P 500 closed the week at1,880.30, down from 1,922.03 last week. The NASDAQ closed Friday at 4,488.82 also sharply down from 4,643.63 last week. 

Bond yields continue to fall - As fear sets in investors have pulled money from stocks and purchased U.S. treasury bonds.  This happens when investors feel that a very low return is better than losing money if stocks drop further. Bond yields are approaching the lowest levels which have been reached from time to time over the past few years. The 10 year U.S. Treasury bond yield closed Friday at 2.03%, down from 2.13% last week.  The 30 year U.S. Treasury bond yield closed Friday at 2.81%, also down from 2.91% last week. 
Mortgage rates fall this week - The 30 year fixed rates below loan amounts of 419,000 fell to 3.75%. 30 year rates for loans above 419,000 are just around 4%. The 15 year fixed was around 3.10%. The 5 year was around 3%.

California posts strong sales and price increases in 2015 - The California Association of Realtors reported that their preliminary figures indicate that there were 407,060 resale single family homes sold in 2015. That marks a 6.5% increase from 382,720 resales in 2014. There were 9.6% more December sales than November.  November had unusually low closing figures which were attributed to delays caused by implementation of new disclosure requirements.Condominium and townhouse sales were up 25.1% from November and were 10.2% higher than last December.  The statewide median price of a home was $489,310, which was up 2.6% from November and 8% higher than one year ago! The median price is the price in which half the homes sell for more and half sell for less. The unsold inventory index fell in December to a 2.7 month supply of homes, a historically low figure. A normal market had a 6-7 month supply. Such a low supply of inventory could cause prices to spike.

Economic update for the week ending January 8, 2017

January 8, week end - Stocks have worst week since 2011 - DOW drops 1,000 points - DOW and S&P down 6% for the week- Chinese stock markets collapsed this week. Their markets were shut down twice after drops so 7% each. The government stepped in an assured investors they would not push to devalue their currency further, and, depending on the report you read, may have purchased stocks to stem the fall. By the end of the week the Shanghai Composite Index fell more than 10%. Markets around the world followed, including ours. On Friday the U.S. jobs report which showed that the U.S. Economy appears to be still expanding stabilized markets here and in Europe. ( although our markets sold off late in the day and closed down) Asia markets had already closed for the night before the report was released. Oil dropped further hitting as low as $32 a barrel on reports of a world wide oversupply. This was over a 10% drop for the week. This also hurt the markets, especially energy stocks. The dollar strengthened further. It rose all week and rose .04% on Friday alone after the strong jobs report. This and further slowing in China hurt stocks of companies which sell goods to China.   The Dow closed January 8, 2016 at 16,346.45, down sharply from 17,425.03 the previous week. The S&P 500 closed the week at 1,922.03, down from 2043.94 the previous week. The NASDAQ closed Friday at 4,643.63, also sharply down from 5,007.41 the previous week. 

Oil prices continue to tumble - Crude oil ended 2015 at $37.04 a barrel down from $60.48 at the close of 2014, a 38% decrease. The lowest since the depths of the recession in 2009. Oil prices were at $101 a barrel in June of 2014. Many parts of the country have gas prices under $2.00 per gallon. California is about $2.60 per gallon, due mostly to higher taxes, and closures at California refineries. The energy sector  closed out the year down nearly 24%, making it the worst performer in the S&P 500.

January 8, 2016 - Oil prices fall further Oil hit lows of $32 per barrel this week. Down over 10% this week.

Strong dollar hurts U.S. Companies - The dollar strengthened against nearly all other currencies which made U.S. goods more expensive overseas, and foreign goods less expensive at home. This hurt manufacturing as U.S. Companies cut back on products intended to be experts abroad. U.S. auto sales highest ever in 2015 - Americans bought more due to solid December gains by the biggest automakers. 


Treasury Bond yields increase in 2015 – The 10-year Treasury bond closed the year at 2.27% up from 2.17% at the close of 2014. The 30-year treasury yield was 3.01% on Dec. 31, up from 2.75% last December 31! 

January 8, 2016 - Bond yields fall this week - As stocks tumbled investors bought treasury bonds looking for safety.The 10 year U.S. Treasury bond yield closed Friday at 2.13%, down from 2.27% last week.  The 30 year U.S. Treasury bond yield closed Friday at 2.91%, also down from 3.01% last week, Dec. 31. These were the lowest levels since October.

U.S. Existing home sales lowest in 19 months to close the year - New disclosure regulations cause delays - The National Association of Realtors reported that the number of existing homes sold in November dropped 10.5% from October.  Much of the drop in closings occurred due to the new "know before you owe" TRID disclosure regulations that apply to all loans applications taken after October 3, 2015.

Mortgage Rates – The Freddie Mac Primary Mortgage Survey reported that: The 30 year fixed mortgage rate average for the end of the year was 4.01%, a jump from 2014 close at 3.73%. The 15 year fixed was 3.24%, also up from last year’s close of 3.05%. The 5-year ARM was 3.08%, up from 2.98, at end of 2014. The 1 year ARM was 2.68%, and was 2.39% last December 31.  Jumbo rates for loans over $419,000 are 1/8% to ¼% higher than the rates above.

January 8, 2016 -Mortgage rates fall this week - The 30 year fixed rates below loan amounts of 419,000 fell to 3.875%. 30 year rates for loans above 419,000 are just above 4%. The 15 year fixed was around 3.10%. The 5 year was around 3%.

Economic update for the week ending Dec 26, 2016

Stocks rise in quiet abbreviated trading week - A rise in oil prices pushed stocks higher this week. For the week oil prices were up 10% after plummeting in December to lows not seen in years.  The  Dow Jones Industrial Average closed the week at 17,552.17,  up from last week's close of 17,128.55.  The S&P 500 closed the week at  2,060.99, up from last Friday's close of 2,005.55.  The NASDAQ closed the week at 5,048.49, up from last week's close of 4,923.08

Treasury bonds yields unchanged for the week - The 10 year treasury bond yield closed the week at 2.24%, unchanged from 2.21% last Friday.  The 30 year treasury bond yield closed Friday at 2.96%, almost unchanged from last week's close of 2.92%.

Mortgage rates   - The 30 year fixed rates are around 4.00% for loans up to $417,000, and around 4.25% for loans over $417,000.  The 15 year fixed rate loans are about 3.375% for loans up to $417,000, higher 15 year term loan amounts have rates that are around 3.50%. 3-Year ARM and 5 -Year ARM rates are both around 3%.  

U.S. Existing home sales lowest in 19 months in November - New disclosure regulations cause delays - The National Association of Realtors reported that the number of existing homes sold in November dropped 10.5% from October. This marked the lowest number of homes sold in 19 months. These figures represent closed transactions reported to local Realtor associations.  Much of the drop in closings occurred due to the new "know before you owe" TRID disclosure regulations that apply to all loans applications taken after October 3, 2015, which has delayed closings nation wide. This new disclosure process which was intended to make loan programs and the costs involved in real estate transactions easier to understand, has done exactly the opposite. Not even the lenders know how to fill out these disclosures! Over time it's gone from confusing to pretty much indecipherable as new regulations have been implemented. That being said, once the lenders figure out how they want to fill out these forms we should get back to closings as usual. Unfortunately, borrowers will be forced to sign something that nobody can clearly explain in order to get a loan. 

Economic update for the week ending Dec 19, 2016

First Fed rate hike in almost a decade - The Federal Reserve announced its first rate hike since 2006 on Wednesday. This was widely anticipated. The rate increase was a 1/4% from the near 0% put into effect in 2008 to help lift the country out of recession. At the depth of the recession the U.S. unemployment rate had hit 10%. It has dropped to 5%. With such strong job gains most experts felt that a rate increase was overdue. Fed Chairperson, Janet Yellen stated that the economy was on solid footing, unemployment has dropped and is expected to drop further, and inflation, while below the target rate, is showing signs of normalization. The Federal Funds Rate and Discount Rate are overnight rates set by the Fed charged to banks. Following the Fed's increase banks increased their prime rates by 1/4%. Most home equity lines are tied to prime, so they went up 1/4%. Longer term loans were not affected. They are the same as they have been for a couple of months. Short term adjustable loans will probably increase slightly.

Stocks surged upon Fed rate hike announcement only to drop Thursday and Friday - Investors bought stocks following the announcement of a 1/4% rate hike by The Fed, as it was a clear sign that The Fed felt the economy was solid. The Dow gained 225 points Wednesday following the announcement. Unfortunately, on Thursday and Friday the market was again rattled by fears that demand for U.S. Companies' goods were slipping due to slowing overseas. On Friday we saw further drops, one was Apple, which has slid 10% in December, mostly due to weaker overseas sales. Oil and natural gas hit multi year lows in prices as demand has slowed. Auto sales were weaker that expected, and some banks reported earnings that were below expectations. The Dow Jones Industrial Average closed the week at 17,128.55, down from last week's close of 17,265.21. The S&P 500 closed the week at 2,005.55, down from last Friday's close of 2,012.27. The NASDAQ closed the week at 4,923.08, down from last week's close of 4,933.37.

Treasury bonds yields - Bond yields rose early in the week as did the stock markets, but dropped Thursday and Friday as investors sold stocks and moved money to the safety of bonds. The 10 year treasury bond yield closed the week at 2.21%, up from 2.13% last Friday. The 30 year treasury bond yield closed Friday at 2.92%, almost unchanged from last week's close of 2.88%. It's interesting to note that 10 and 30 year U.S. treasury notes were actually paying a higher yield before The Fed raised rates on Wednesday than the yield they ended the week at on Friday.

Mortgage rates - Rates were slightly higher than they were last Friday, but are the same as they have been for the last couple of months, with the exception of last Friday. Anyone who locked in on that day saved 1/8%! The 30 year fixed rates are around 4.00% for loans up to $417,000, and around 4.25% for loans over $417,000. The 15 year fixed rate loans are about 3.375% for loans up to $417,000, higher 15 year term loan amounts have rates that are around 3.50%. 3-Year ARM and 5 -Year ARM rates are both around 3%.

California employers add just 5,500 workers in November - The U.S. Department of Labor released data showing that California employers added just 5,500 jobs in November. This was a significant slowdown from robust monthly gains seen throughout the year. The unemployment rate dropped to 5.7%, an 8 year low. Despite the unimpressive job growth wages grew 2.6% over the last 12 months in California, well above the 1.9% national rate for the same period.

Home sales and prices slide in November - The California Association of Realtors reported that the number of existing home sales (re sales) slipped 8.4% from October. Further, the number of homes sold was down 1.6% from November 2014. It marked the first time this year we have not seen a same month over month increase in the number of sales compared to 2014. These numbers do not make sense compared to the October pending sales figures which should have resulted in more closed sales than we had. We will need to wait until December to see how much of this decrease was due to transactions delayed because of confusion over The Consumer Financial Bureau's - know before you owe disclosure regulations, known as TILA, which applies to all home loan applications taken after October 3, 2015. Many transactions closed late as lenders have been and are still confused on how to interpret the rules, and how to fill out the disclosures. Personally, to me, it looks like they took something that was confusing and made it almost indecipherable. The purpose of the change was to make the costs, products and rates more clearly disclosed. This has not been the result in my view! The median price of a single family detached home in California dipped 0.2% in November, but was 6.8% higher than last November.

Economic update for the week ending Dec 12, 2016

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Federal Reserve meeting this week - Speculation is that the Federal Reserve will announce its first rate hike in nearly a decade - The Federal Open Market Committee meeting will be held this Tuesday and Wednesday, December 15-16. The FOMC sets interest rate policy. It is widely believed that the Fed will announce a 1/4% rise in the Federal Funds and Discount rates on Wednesday at the conclusion of the meeting. Interest rates are used by the Fed to control inflation, and to stimulate or slow the economy. The last interest rate hike was in 2006. In 2007 The Fed began reducing rates, first due to the credit market collapse and later in 2008 to help lift the country out of recession. By 2009 the Fed had dropped its benchmark rates to 0%, an unprecedented step. Over the next few years they used other policies which they called "quantitative easing" to pump money into the economy. Those included purchasing treasury bonds and mortgage securities. At one point they were purchasing $85 billion a month worth of these investments to help lower long term rates. This was done to encourage borrowing which encourages investing. These quantitative easing programs ended in 2014, as the economy and job market strengthened, yet the benchmark rates set by the Fed have remained at 0%. At the depths of the recession in October of 2009 the U.S. unemployment rate peaked at 10%. It has dropped dropped steadily and was 5% in November 2015. Many experts have wondered why the Fed rates have been at this unprecedented low rate for so long. It is widely expected that the Fed will announce that they will begin to rise rates slowly with the first increase on Wednesday. These rates are overnight rates that The Fed charges banks for money owed. If the Fed does announce a rate hike expect banks to increase their "prime" lending rate the same percentage. As for home loans: Equity lines that are tied to prime will increase. Long term loans like 15 and 30 year fixed terms will probably not be affected. Short term adjustable rates will increase. Savers will see higher savings rates paid to them on bank accounts. Next week's update will include what the Fed did and what followed as a result!

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Economic update for the week ending Dec 5, 2016

Stocks surge following release of jobs report - Stocks surged Friday after the Labor Department reported that employers added 211,000 jobs in November. The Dow added 367 points for the day, its largest gain since September. This reversed a drop in stocks on Wednesday and Thursday due to lower oil prices, which has oil back down under $40 a barrel, and disappointment in the size of Europe's newly announced stimulus package. The Dow Jones Industrial Average closed the week at 17,847.63, up from last week's close of 17,798.49. The S&P 500 closed the week at 2,091.69, unchanged from last Friday's close of 2,090.11. The NASDAQ closed the week at 5,142.27, up from last week's close of 5,127.53.

Treasury bonds yields unchanged - The 10 year treasury bond yield closed the week at 2.27%, almost unchanged from 2.22%, last Friday. The 30 year treasury bond yield closed Friday at 3.01%, about the same as last week's close of 3.00%. Investors feel that a rate hike by the Fed is pretty much "built into" longer term rates. This was evident when the robust jobs report, which pretty much guarantees a Fed rate hike will be announced at the conclusion of the Federal Reserve December 15 - 16 meeting, did not cause rates to rise. It will be the first interest rate hike in nearly 10 years, which is actually a positive sign that the Fed feels that the economy is strong.​

Economic update for the week ending Nov 28, 2016

Treasury bonds yields unchanged - The 10 year treasury bond yield closed the week at 2.22%, almost unchanged from 2.25%, last Friday.  The 30 year treasury bond yield closed Friday at 3.00%, about the same as last week's close of 3.02%. It will be interesting to see what happens to bond yields in the coming weeks, especially if the Fed raises short term rates. With low inflation and such a strong dollar it's likely that a rate increase on the Fed's overnight rates may not effect longer term rates, but nobody knows how the markets will react. 

Mortgage rates unchanged  -  The 30 year fixed rates are around 4.00% for loans up to $417,000, and around 4.25% for loans over $417,000.  The 15 year fixed rate loans are about 3.375% for loans up to $417,000, higher loan amounts have rates that are around 3.5%. 5-Year ARM and 3–Year ARM rates are both around 3.25%.

New home sales rebounded in October- The Commerce Department reported that sales of new homes increased 10.7% in October after a disappointing September. Experts felt that because U.S. New home sales surged in October and the inventory of new homes for sale was the highest since 2010, demonstrates the strength of the housing market.

California pending home sales bounce back in October - The California Association of Realtors reported that their pending home sales index rose 2.5% in October from September. On an annual basis pending sales were up 13.9% from October 2014. In Southern California October pending home sales were up 9.8% from September and up 9% from October 2014.

Economic update for the week ending Nov 21, 2016

Mortgage rates stable - The 30 year fixed rates are around 4.00% for loans up to $417,000, and around 4.25% for loans over $417,000. The 15 year fixed rate loans are about 3.375% for loans up to $417,000, higher loan amounts have rates that are around 3.5%. 5-Year ARM and 3–Year ARM rates are both around 3.125%.

California adds 41,200 jobs in October - Unemployment rate lowest since 2007 - Cali...fornia's unemployment rate fell to 5.8% in October, down from 5.9% in September. It marked the lowest rate since October 2007. At the depth of the recession in 2010, California's unemployment rate rose above 12%, higher than every state except Michigan and Nevada. Over the last 3 years the state has added jobs at a rate faster than all but 5 states. Over the past year California has added jobs at a rate of 2.9%, outpacing the national job growth rate of 2%. October's unemployment rate of 5.8% is even more impressive considering that just one year ago the state's unemployment rate was 7.2% last October.

California home sales and prices slide in October- The California Association of Realtors announced that sales of existing homes in California declined 5.1% in October from September levels. The number of sales were 1.3% higher than October 2014, the smallest year over year increase in 2015, fueling speculation that the housing market is stalling. Prices also moderated as the statewide median price dropped 1.3% from September, yet it was up a healthy 5.7% from October 2014. The unsold inventory index remained unchanged for a third month at a 3.7 month supply, a low inventory level. I would consider this a seasonal slowing that is to be expected, yet it's possible that it has slowed a little more than seasonal due to some nervousness in the housing market. It should be noted that October closings are some sold in August and September when the DOW lost 2,000 points. That made everyone nervous. Since October the DOW has made back that entire loss. I would think that sales numbers on a year over year basis to be stronger in November and December. I also fully expect sales to rebound and prices to begin to increase again soon after the new year.

​​Economic update for the week ending Nov 14, 2016

Low spending and inflation data released this week cause stocks to slide - The largest last 12 month drop in producer prices since the depths of the recession, and a weak retail spending report caused investors to pull back on stock purchases ending a rally of  6 straight weeks of  gains.  Stocks also probably suffered from the largest terrorist attacking since 9-11 when a coordinated attack hit Paris yesterday. The Dow dropped 202 points yesterday following the attacks. It was down 665 points for the week. The  Dow Jones Industrial Average closed the week at 17,245.24, down from last week's close of 17,910.33.   The S&P 500 closed the week at  2,023.04, down from last Friday's close of 2,099.20.  The NASDAQ closed the week at 4,927.88, down from last week's close of 5,147.12.

Treasury bonds yields mostly unchanged from last week - Weak inflation and spending data failed to convince investors that the Federal Reserve would hold off on increasing interest rates at the December meeting.  Most investors expect that after October's strong job growth and wage growth a rate increase is expected. The 10 year Treasury bond yield closed the week at 2.28%, slightly lower than 2.34% last Friday.  The 30 year treasury bond yield closedFriday at 3.06% about the same as last week's close of 3.09%.

Mortgage rates stable after rising last week -  The 30 year fixed rates are around 4.00% for loans up to $417,000, and around 4.25% for loans over $417,000.  The 15 year fixed rate loans are about 3.375% for loans up to $417,000, higher loan amounts have rates that are around 3.5%. 5-Year ARM and 3–Year ARM rates are both around 3.125%.

Retail sales flat in October - Retail sales rose just 0.1% in October according to the Commerce Department.Experts expected a 0.3% increase. Much of the drop was due to poor auto sales which were down 0.5%. Excluding auto sales retail sales grew just 0.2%, still below the amount expected. This is a sign that consumers may be pulling back on their spending, which could affect the 4th quarter GDP figures, which experts had expected would rebound after a disappointing 3rd quarter.

Consumer confidence higher than one month ago - The University of Michigan consumer sentiment index rosefrom 90.0 in October to 93.1 in early November. The report showed that consumers plan to increase spending slightly compared to those surveyed last month. This report did little to ease investors concerns about slowing growth in recent months.

Producer prices continue to fall - The Labor Department reported that its producer price index fell 0.4% in in October. For the 12 months ending October the PPI fell 1.6%, the largest decline in producer prices since the depths of the recession for a 12 month period ending in 2009. The Producer Price Index is a weighted index of prices measured within the wholesale markets, manufacturing industries, and commodities markets. ​

Economic update for the week ending Nov 7, 2016

U.S. employers add 271,000 jobs - The Labor Department reported that U.S. Employers added 271,000 non-farm jobs in October.  It was the most robust job growth in 10 months which caught experts by surprise after 2 months of disappointing job growth, and a weak third quarter GDP growth figure released just last week. Experts expectations were 150,000 jobs so 271,000 blew analysts away. The unemployment rate fell to 5%, its lowest level since April 2008. Even more positive was wage growth which has been below the targeted growth rate desired by The Fed. Average hourly wages were up 0.4% in October from September. For the last 12 months wages are up 2.5% from last October.

Stock markets rise for a 6th straight week of gains - Stocks have recovered nicely from the market's steep slides in August and September.  That slide was termed a "correction" which is defined as a drop of 10% or more. The sharp rebound was fueled by strong 3rd quarter corporate earnings by U.S. Companies which beat expectations and positive signs in Europe and Asia.  Those included economic stimulus to boost their economies like the measures we took during the recession. The  Dow Jones Industrial Average closed the week at 17,910.33, up from last week's close of 17,663.54.  The S&P 500 closed the week at  2,099.20, up from last Friday's close of 2,079.36.  The NASDAQ closed the week at 5,147.12,  up from last week's close of 5,053.75.

Treasury bonds yields rise after job report shows robust growth  - A very strong jobs report showing that the economy added 271,000 jobs, almost double what analysts expected, caused investors to fear that The Federal Reserve would raise interest rates at the December policy meeting.  It will be the first rate increase since 2006 if The Fed follows through. Even if they do raise rates experts believe that they won't go too high or rise very quickly. Rates on bonds and mortgages rose after the jobs figures were announced. The 10 year Treasury bond yield closed the week at 2.34%, up from 2.16% last Friday.  The 30 year treasury bond yield closed Friday at 3.09%, up from last week's close of 2.96%.

Mortgage rates inch up slightly this week -   The 30 year fixed rates are around 4.00%for loans up to $417,000, and around4.25% for loans over $417,000.  The 15 year fixed rate loans are about 3.375% for loans up to $417,000, higher loan amounts have rates that are

around 3.5%. 5-Year ARM and 3–Year ARM rates are both around 3.125%.

Economic update for the week ending October 30, 2016

Pending home sales slightly lower in September - The California Association of Realtors announced that the pending home sales index decreased 1.5% in September from August.  This is seasonal and was much better than the average decline of 3.4% that we have seen from August to September over last seven years. Southern California showed the largest drop in pending sales. Contracts in Southern California were down 8.9% in September from August, but up 10.2% from last September.

Fed leaves interest rates unchanged at October policy meeting - Federal Reserve Chairperson Janet Yellen announced that The Fed elected to leave its benchmark rates at near zero levels at the conclusion of their 2- day meeting on Wednesday. She did say they the Fed was open to raising rates at their December meeting as they still believe that the fundamentals of the economy point to moderate growth. It was definitely a mixed message, which experts are used to from the Fed. It is widely believed that the Fed was cautious after lower than expected job creation over the last two months, but if job growth picks back up the Fed will go ahead with the first rate increase since 2006. Nevertheless, the Fed's optimism did drive bond yields up slightly.

Treasury bonds yields rise following Fed's statement  - The 10 year Treasury bond yield closed the week at 2.16%, up from 2.09% last Friday.  The 30 year treasury bond yield closed Friday at 2.96%, up from last week's close of 2.90%.

Mortgage rates inch up slightly this week -   The 30 year fixed rates are around 3.875% for loans up to $417,000, and around 4.00%  for loans over $417,000.  The 15 year fixed rate loans are about 3.20% for loans up to $417,000, higher loan amounts have rates that are around 3.375%. 5-Year ARM and 3–Year ARM rates are both around 3.00%.

Economic update for the week ending October 24, 2016

After fourth straight week of gains stocks have made up most of the losses from their August  and September slide - Higher then expected third quarter corporate earnings showed that slowing in Asia and Europe, a strong dollar, and low oil prices have not led to slowing in the U.S. which would have affected corporate profits. NAR also reported that real estate sales rebounded in September after slumping in August. China's central bank, The People's Bank of China, announced another 1/4% drop in its key 1 year rate, its sixth rate cut since last November, to spur growth. This was a surprise move as their 3rd quarter GDP beat analysts expectations, yet was slightly below the People's Bank's target rate.  The European Central Bank also announced that it would extend its monetary easing program to further stimulate the economy.  These moves were both well received by investors.  The Dow Jones Industrial Average closed the week at 17,646.70, up from last week's close of 17,215.97. The S&P 500 closed the week at  2,075.15, up 2.1% from last Friday's close of 2,033.13. The NASDAQ closed the week at 5,031.86, up 3% from last week's close of 4,886.69.

Treasury bonds yields drop this week - The 10 year Treasury bond yield closed the week at 2.09%,  slightly up from 2.04% last Friday.  The 30 year treasury bond yield closed Friday at 2.90%, almost the same as last week's close of 2.87%. 

Mortgage rates unchanged this week -  They remain at lows of the year –  The 30 year fixed rates are around 3.75% for loans up to $417,000, and around 4.00%  for loans over $417,000.  The 15 year fixed rate loans are about 3.20% for loans up to $417,000, higher loan amounts have rates that are around 3.375%. 5-Year ARM and 3–Year ARM rates are both around 3.00%.

U.S. existing home sales rebound in September - The National Association of Realtors reported that home sales for existing homes which includes resale single-family, condominiums, town homes, and co-ops increased 4.7% in September from August. On an annual rate the number of sales are up 8.8% for the 12 months ending Septembercompared the same period ending September 2014.  The median price was up 6.1% nationwide in September from September 2014, marking the 43rd consecutive month of year over year price increases. This was welcome news for the real estate market as experts were rattled by an unexpected decline in sales in in August. In the Western U.S.the number of  September sales increased 6.7% in September and increased 9.5% from the number of sales one year ago. The median price was also 8% above last year's levels.

​Economic update for the week ending October 17, 2016

Mortgage rates at lows of the year – The 30 year fixed rates are around 3.75% for loans up to $417,000, and around 4.00% for loans over $417,000. The 15 year fixed rate loans are about 3.20% for loans up to $417,000, higher loan amounts have rates that are around 3.375%. 5-Year ARM and 3–Year ARM rates are both around 3.00%.

Existing home sales and prices lower in September than August, but higher than last September - The California Association of Realtors reported that the number of home sales in September were down 1.5% from August, but still up 6.9% from September 2014. This is mostly seasonal. It's not uncommon for sales to taper down after the summer. The state-wide median price paid for a home in September was 482,150 down 2.3% from August, but up 4.3% from September 2014. We are definitely seeing prices softening in our markets at all price points. The unsold inventory index was unchanged at a 3.7 month supply. A normal market has a 6-7 month supply. It's unusual to see prices stabilize or even soften with such low inventory levels. It will be interesting to see what the future brings!

California unemployment rate drops to 5.9% - The Employment Development Department reported that California's unemployment rate dropped from 6.1% in August to 5.9% in September, its lowest rate since November 2007. This was despite California adding just 8,200 jobs in September following adding 42,000 jobs in August.Economic update for the week ending October 10, 2015

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Stocks close the week with big gains - Minutes from the Federal Reserve's September meeting released this week made investors feel that the Fed's first rate rise since 2006 will not happen this year. The notes revealed that The Fed is worried about unusually low inflation, spill over from slowing in China, and unusually low wage growth. They also said that the economy was still growing. The September jobs report showed job growth around 140,000 jobs a month for the last 2 months, after averaging 212,000 new jobs monthly for the first 7 months of the year. That slowdown also caused investors to expect that The Fed will not raise rates in the next couple of months as previously expected. Higher interest rates mean higher borrowing costs which cut into corporate profits, so continued low rates were seen as positive by investors. Oil prices also rose this week on fears of Russia's involvement in Syria. Low oil prices have hurt the energy sector, so energy stocks rose on higher oil prices. The dollar which has been strong this year and has caused U.S. goods to be more expensive overseas and overseas goods to be less expensive here in the U.S. also weakened this week. This was helpful as exports have suffered as a result of the strong dollar and slowing economies overseas. The Dow Jones Industrial Average closed the week at 17,084.49, up from last week's close of 16,472.37. The S&P 500 closed the week at 2,014.89, up from last Friday's close of 1,951.36. The NASDAQ closed the week at 4,830.47, up from last week's close of 4,707.78.

Treasury bonds rise from last week's lows - The 10 year Treasury bond yield closed week at 2.12%, up from 1.99% last Friday. The 30 year treasury bond yield closed Friday at 2.94%, up from last week's close of 2.82%. Bond yields follow stocks as money moves. Often when investors sell stocks on fears in the stock market they buy bonds which are safe but offer a low return. This week they bought stocks and sold bonds which drove bond yields higher.

Mortgage rates rise from last week's lows of the year – The 30 year fixed rates are around 3..875% for loans up to $417,000, and around 4.00% for loans over $417,000. The 15 year fixed rate loans are about 3.20% for loans up to $417,000, higher loan amounts have rates that are around 3.375%. 5-Year-ARM and 3–Year ARM rates are both around 3.00%.

September sales data will be released later in the month. It will be interesting to see how prices and sales numbers are holding up. Stay tuned!

​Economic update for the week ending October 10, 2016

Stocks close the week with big gains - Minutes from the Federal Reserve's September meeting released this week made investors feel that the Fed's first rate rise since 2006 will not happen this year. The notes revealed that The Fed is worried about unusually low inflation, spill over from slowing in China, and unusually low wage growth. They also said that the economy was still growing. The September jobs report showed job growth around 140,000 jobs a month for the last 2 months, after averaging 212,000 new jobs monthly for the first 7 months of the year. That slowdown also caused investors to expect that The Fed will not raise rates in the next couple of months as previously expected. Higher interest rates mean higher borrowing costs which cut into corporate profits, so continued low rates were seen as positive by investors. Oil prices also rose this week on fears of Russia's involvement in Syria. Low oil prices have hurt the energy sector, so energy stocks rose on higher oil prices. The dollar which has been strong this year and has caused U.S. goods to be more expensive overseas and overseas goods to be less expensive here in the U.S. also weakened this week. This was helpful as exports have suffered as a result of the strong dollar and slowing economies overseas. The Dow Jones Industrial Average closed the week at 17,084.49, up from last week's close of 16,472.37. The S&P 500 closed the week at 2,014.89, up from last Friday's close of 1,951.36. The NASDAQ closed the week at 4,830.47, up from last week's close of 4,707.78.


Treasury bonds rise from last week's lows - The 10 year Treasury bond yield closed week at 2.12%, up from 1.99% last Friday. The 30 year treasury bond yield closed Friday at 2.94%, up from last week's close of 2.82%. Bond yields follow stocks as money moves. Often when investors sell stocks on fears in the stock market they buy bonds which are safe but offer a low return. This week they bought stocks and sold bonds which drove bond yields higher.


Mortgage rates rise from last week's lows of the year – The 30 year fixed rates are around 3..875% for loans up to $417,000, and around 4.00% for loans over $417,000. The 15 year fixed rate loans are about 3.20% for loans up to $417,000, higher loan amounts have rates that are around 3.375%. 5-Year-ARM and 3–Year ARM rates are both around 3.00%.

September sales data will be released later in the month. It will be interesting to see how prices and sales numbers are holding up. Stay tuned!

​Economic update for the week ending October 3, 2016

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Mortgage Rates fall in September – Rates for October 2, 2015 –  The 30 year fixed rates are around 3.75% for loans up to $417,000, and around 3.875% for loans over $417,000.  The 15 year fixed rate loans are about 3.00% for loans up to $417,000, higher loan amounts have rates that are around 3.25%. 5 Year-ARM and 3–Year ARM rate are both around 3.00%.

U.S. Employers add 142,000 jobs in September  – unemployment rate unchanged at 5.1% - The Labor Department reported that US employers added 142,000 non-farm new jobs in September.  The unemployment rate remained at 5.1%, its lowest level since  2008. It was a disappointing report as 203,000 new jobs were expected by experts. This was the second straight month that job growth fell well below expectations, as August was revised down to 136,000 jobs added from 172,000. Many experts feel that the Fed’s decision not to raise interest rates is better understood as the last two months have been the weakest in several years.  Average hourly wages also fell for the first time this year after looking in July and August that wage growth was beginning to tick up. Wage growth is well below the Fed’s target rate for healthy growth. This was a bad report in every way, except for interest rates which dropped to the lowest levels of the year. The report shows that falling oil prices, a strong dollar, weakness in China and Europe are beginning to cause slowing in the U.S.. The energy sector lost 12,000 net new jobs in September, after losing 9,000 in August, bringing the total loss of energy sector jobs to 100,000 so far this year, as a result of falling oil prices.  Weakness in China, and the strong dollar has caused exports to fall. Exports were down over 5% for the year ending July and are forecasted to be down nearly 10% in August from a year ago.  This has caused manufacturing to shed 9,000 jobs in September, after losing 18,000 jobs in August. Experts feel that this report will surely give The Fed something to think about when they decide whether or not to raise their benchmark rates from near 0% where they have been since 2008 in an attempt to stimulate the economy.

California employers add 36,200 non-farm jobs - The state's unemployment rate dropped to 6.1% in August from 6.2% in July. Unemployment is at its lowest level since January 2008 in California according to the Bureau of Labor Statistics. Since August of 2014 the state has gained 470,000 jobs. That represents an annual growth rate of 3% which has outpaced the national average of 2.1% for the 50 states.

Economic update for the week ending September 26, 2016

​Mortgage rates just under 4% – The 30 year fixed rates ended the week around 3.875% for loans up to $417,000, and around 4.00% for loans over $417,000. The 15 year fixed rate loans are about 3.25% for loans up to $417,000, and around 3.375% for loans over $417,000. The 5 Year-ARM rate is around 3.00% and 1 Year-ARM mortgages are about 2.50%.

Treasury Bond yields slightly lower this week – The 10 year Treasury bond yield closed week at 2.17%, up slightly from 2.13% last Friday. The 30 year treasury bond yield closed Friday at 2.96%, almost unchanged from last week's close of 2.93%. Mortgage rates follow bond yields so these are closely watched.
Consumer confidence reading the edges up in September- The University of Michigan final reading on consumer sentiment for September moved higher. It ended the month at a reading of 87.2 from an initial reading of 85.7 at the beginning of the month. The average reading since its inception has been 85.3. The average reading during the 5 recessions since its inception has been 69.3. During non-recessionary years the average reading has been 87.5, which is right about where we are. Consumer sentiment is important because consumer confidence is so closely tied to consumer spending which accounts for nearly a third of the economy.

Second quarter GDP revised upward - The Commerce Department said Friday that the second quarter gross domestic product showed a growth rate of 3.9%. This was higher than their initial estimate of 3.7%. The Commerce Department also said Friday that consumer spending rose 3.6% during the quarter up from an initial estimate of 3.1%.

Pending home sales decline in August, but numbers are still above last year's levels - The California Association of Realtors reported that pending home sales fall 8.7% in August from July. While monthly pending home sales were down, year over year pending home sales in August were still up 12.8% from August 2014. It was the 10th straight month of year over year increases in the number of pending sales, and the 7th straight month of double-digit year-to-year gains.​

​​​Economic update for the week ending September 19, 2016

Mortgage just under 4%  –  The 30 year fixed rates ended the week around 3.875% for loans up to $417,000, and around 4.00% for loans over $417,000.  The 15 year fixed rate loans are about 3.25% for loans up to $417,000, and around 3.375% for loans over $417,000. The 5 Year-ARM rate is around 2.75% and 1 Year-ARM mortgages are about 2.50%. 

Treasury Bond yields slightly lower this week – The 10 year Treasury bond yield closed week at 2.13%, down from 2.20% last Friday.  The 30 year treasury bond yield closed Friday at 2.93%, almost unchanged from last week's close of 2.95%. Mortgage rates follow bond yields so these are closely watched.

California employers add 36,200 non-farm jobs - The state's unemployment rate dropped to 6.1% in August from 6.2% in July. Unemployment is at its lowest level since January 2008 in California according to the Bureau of Labor Statistics. Since August of 2014 the state has gained 470,000 jobs. That represents an annual growth rate of 3% which has outpaced the national average of 2.1% for the 50 states. 

California existing home sales and prices beginning to level - The California Association of Realtors reported that the number of homes sold in August dropped 3.8% on an annualized level from the number of homes sold in July. Sales were still up 9.3% from the annualized number of homes sold last August. This year the number of sales have been much higher than last year which was the lowest number of sales in decades, but those increases did moderate in August. Prices are beginning to level as well, according to The California Association of Realtors. The statewide median price in August was up 1% from July, and up only 2.5% from August 2014. That marks the lowest year over year price increase in 3 1/2 years. Unsold inventory ticked up to a 3.6 month supply from a 3.3 month supply in July. This is still a very low number. A normal market has a 6-7 month supply.

Economic update for the week ending September 12, 2016

Will the Fed raise rates? Federal reserve meeting next week - The Fed will be meeting Wednesday andThursday to discuss monetary policy.  On Thursday at 11:00 AM Pacific Time they will announce whether or not they will make their first interest rate increase since 2006. The Fed controls the Discount Rate and Federal Funds Rate.  These rates are overnight rates they charge lending institutions. These are short term rates. When the Fed rises or lowers these rates banks follow with similar increases or decreases to their "prime rates".  The prime, the rate banks charge their best customers, is at a higher rate than they pay and the spread is their profit.  The Fed began lowering interest rates in 2007 in an attempt to make borrowing costs less expensive to encourage companies and people to borrow more money to spur the economy.  Unfortunately, these rate reductions did not work quickly enough.  They continued to lower rates for almost a year, as the country slipped further into recession. By the end of 2008 their benchmark rates were near zero percent. A rate that has never before been offered by the Federal Reserve. After that, lowering rates was no longer an option as you can't go lower than zero!  Next they used other methods that had never been attempted. Some of those included purchasing treasury bonds and mortgage securities to lower long term rates. The Fed purchased trillions of dollars of mortgages and treasury bonds before tapering down the buying which ended in 2014.  At one point they were buying $85 billion a month worth of treasuries and mortgages which did bring down mortgage rates to the lowest levels in 50 years.  As the country had emerged from recession and had seen solid job growth the bond and mortgage buying was tapered down slowly until the program ended. That was over a year ago. Experts feel, and the Fed has stated, that because the  unemployment level has dropped nearly to half of what it was in the peak of The Great Recession and growth is more solid leaving fed rates near zero is no longer necessary, and an increase is coming.  It was widely speculated that this rise would come at next week's meeting, but as other risks to the economy have emerged it is possible the Fed will wait. If the Fed does raise rates it will be the first rise in almost a decade. The stock market has reacted badly to an impending rate rise, but many experts feel that going from near zero to 1/4% is really no big deal and fear is an overreaction. It's a tough decision for The Fed. Employment news is good, wages showed an uptick in August, auto, home and retail sales have been strong. These factors point to a no-brainier that an interest rate rise is overdue. On the other hand: Inflation is nonexistent. Consumer confidence is dropping. The dollar has risen 17.5% against the currencies of the U.S.'s main trading partners, making our exports more expensive. China, the world's second largest economy, is in the midst of a slowdown. These all pose a risk to the economy. That's normally a no-brainer to not raise rates! We will know at 11 AM Thursday either way!

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​​​Economic update for the week ending September 5, 2016

Mortgage rates remain near lows for the year   –  The 30 year fixed rates ended the week around 3.875% for loans up to $417,000, and around 4.00% for loans over $417,000.  The 15 year fixed rate loans are about 3.25% for loans up to $417,000, higher loan amounts have rates that are around 3.375%. The 5 Year-ARM rate is around 2.75% and 1 Year-ARM mortgages are about 2.50%. 

Treasury Bond yields rose from lows early in the week and closed higher than last week – Investors bought stocks and pulled money from the safety of U.S Treasury Bonds pushing yields up from Monday's lowest point in over a year. The 10 year Treasury bond yield closed week at 2.13%, almost unchanged from 2.19% last Friday.  The 5 year was under 2% at one point on Monday. The 30 year treasury bond yield closed Friday at 2.89%, down slightly from last week's close of 2.92%. 

U.S. Bank's earnings rise - The FDIC reported that profits from U.S. Banks rose 7.3% in the second quarter of 2015. The number of "problem banks" continued to fall. Only 5.6% of all banks were not profitable. This was by far the most healthy banks have been since the financial crisis which began in 2007.

Factory orders higher - Orders from U.S. Factories posted a modest gain in July according to The Commerce Department. Factory orders were up 0.4% in July. This was not as good as June's 2.2% increase, but it did build on that increase.

Economic update for the week ending August 29, 2016

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Mortgage rates rise slightly from Monday's lows  –  The 30 year fixed rates ended the week around 3.875% for loans up to $417,000, and around 4.00% for loans over $417,000.  The 15 year fixed rate loans are about 3.25% for loans up to $417,000, higher loan amounts have rates that are around 3.375%. The 5 Year-ARM rate is around 2.75% and 1 Year-ARM mortgages are under 2.50%. At one point the fixed rate hit 3.625% during Monday'sstock sell off.

Treasury Bond yields rose from lows early in the week and closed higher than last week – Investors bought stocks and pulled money from the safety of U.S Treasury Bonds pushing yields up from Monday's lowest point in over a year. The 10 year Treasury bond yield closed week at 2.19%, up from 2.05%. last Friday.  The 5 year was under 2% at one point on Monday. The 30 year treasury bond yield closed Friday at 2.92%, up from last week's close of 2.74%. 

U.S. Economy expanded at 3.7% annual rate in the second quarter - The Commerce Department reportedThursday that the GDP (gross domestic product), the broadest measure of goods and services in the economy, grew at an annual rate of 3.7% in April, May and June.  This eclipsed the estimated 2.3% growth rate that was expected. It was welcome news that the economy was expanding with more momentum than expected in light of a massive sell off in the stock market in which the DOW lost over 1600 points in 6 sessions.  Partially due to this report it gained back about 1,000 points Wednesday and Thursday. Unfortunately, after this report mortgage rates rose about 1/8% across the board, as it does increase the likelihood that The Federal Reserve will follow through on its first interest rate rise since 2006, which they have indicated would happen later this year. 

Inflation eases in July - The Labor Department reported that The Consumer Price Index rose 0.1% in July. This followed increases of 0.3% in June and 0.4% in May. This showed that inflation pressures are very moderate. The core inflation rate, which excludes food and energy, grew at just 0.1% in July after a 0.2% June gain.  This is how The Fed measures prices as measured by the personal consumption expenditure, what ever that means! It is the Fed's prefered way of measuring core inflation.  The Fed's core inflation rate measurement is at 1.2% over the past 12 months, which is well below its target of 2%. Usually, the Fed would raise or lower rates to control inflation. With the Fed's benchmark rate near zero, an unprecedented level since 2008 it is likely, according to them, that they will raise their discount and funds rates even though inflation is below where they want it. Experts feel that a 0.1% inflation gain in July is so low that the Fed may hold off on an increase, as deflation is as dangerous to the economy as inflation.

Consumer sentiment falls in August - The University of Michigan's final August reading of consumer sentiment fell to its lowest level since May last week. The survey was done while the stock market had dropped 1600 points over 6 sessions and before it made up 1,000 points Wednesday and Thursday, and before the positive quarter 2 GDP results were released. Expect September's readings to be higher!

S&P / Case Schiller says home prices continuing to rise - U. S. Home prices continued to rise in June according to The S&P / Case Schiller Home Price Index.  It's 20 city index rose 5% year over year in June. Case  Schiller computes home prices in 20 major cities with a different formula which is more reflective, according to them,  of the actual prices than the median price used by others, as prices in major cities exceed the median price levels.​​​

​Economic update for the week ending August 21, 2016

Mortgage rates fall to lowest levels of the year   –  The 30 year fixed rates ended the week around 3.75% for loans up to $417,000, and around 3.875% for loans over $417,000.  The 15 year fixed rate loans are about 3.125% for loans up to $417,000, higher loan amounts have rates that are around 3.25%. The 5 Year-ARM rate is around 2.75% and 1 Year-ARM mortgages are under 2.50%.

Treasury Bond yields drop this week – Investors fled stocks and moved to the safety of U.S Treasury Bonds pushing yields down to the lowest levels of the year. The 10 year Treasury bond yield closed week at 2.05%, down from 2.20% last Friday.  The 30 year treasury bond yield closed Friday at 2.74%, down from last week's close of 2.84%. 

California home sales at 9-year high - CoreLogic reported that existing home sales in July hit a 9 year high.  The number of homes sold in July increased 16.9% from last July. Home prices were also higher with the median price up 5.5% year over year. The California Association of Realtors reported that sales were up 2.7% from June and 12.7% from July 2014. CAR reported that prices were up 5.4% year over year. Housing remained at a 3.3 month supply, well below normal levels of 6 a 7 months. CoreLogic uses information from recorded sales at counties throughout the state, while The California Association of Realtors uses reported sales from its Realtor members. 

U.S. home sales at highest rate since February 2007 - The National Association of Realtors reported Thursday that existing home sales rose 2% in July. Home sales in July were at at their highest level since February  2007 on an annualized basis. 

Home builders index shows homeowners and builders are the most optimistic in over a decade - The National Association of Home Builders reported that the confidence level of homeowners to home builders rose to its highest reading since November 2005.

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Economic update for the week ending August 15, 2016

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30 year fixed mortgage rates still below 4%   –  The 30 year fixed rates ended the week around 3.875% for loans up to $417,000, and around 4.00% for loans over $417,000.  The 15 year fixed rate loans are about 3.125% for loans up to $417,000, higher loan amounts have rates that are around 3.375%. The 5 Year-ARM rate is around 3.00% and 1 Year-ARM mortgages are around 2.50%.

Treasury Bond yields stable this week – The 10 year Treasury bond yield closed week at 2.20%, it was 2.18% last Friday.  The 30 year treasury bond yield closed Friday at 2.84%, unchanged from last week's close of 2.83%. 

U.S retail sales rise 0.6% in July - The Commerce Department reported that U.S. Retail sales rose 0.6% in July after being flat in June. This beat experts forecast. The report showed that sales rebounded in July as households boosted purchases of automobiles, clothing, and a range of other goods. Experts feel that this suggests solid momentum in the economy early in the third quarter. Unfortunately, this upbeat report strengthened expectations that the Federal Reserve would begin to raise interest rates as early as next month. This did move bonds and mortgage rates off their lows of the week. 

Mortgage payments more affordable than rents - According to Zillow's affordability report for the second quarter of 2015, rents are at an all time high for single family homes, but monthly payments are more affordable than they were before the housing bust. Zillow found that renters nationwide can expect to spend 30.2% of their monthly income on rent and 40% in Los Angeles, San Jose, and San Francisco. They found that homebuyers nationwide can expect to spend 15.1% of their income on a mortgage payment. In the years immediately prior to the housing crisis in 2008 Zillow says that homebuyers could expect to spend 21.3% of their monthly income on a house payment. Next week we will get housing price and sales data for July. I'd think it will show prices continuing to rise and robust sales based on what we are seeing.

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Economic update for the week ending August 8, 2016

30 year fixed mortgage rates below 4% for second week  –  The 30 year fixed rates ended the week around 3.875% for loans up to $417,000, and around 4.00% for loans over $417,000.  The 15 year fixed rate loans are about 3.125% for loans up to $417,000, higher loan amounts have rates that are around 3.375%. The 5 Year-ARM rate is around 3.00% and 1 Year-ARM mortgages are around 2.50%.

Treasury Bond yields stable this week – The 10 year Treasury bond yield closed week at 2.18%, the same as it was last Friday.  The 30 year treasury bond yield closed Friday at 2.83%, down from last week's close of 2.91%.  It is widely felt that with low inflation a Fed rate hike won't heavily affect the longer term bond rates, especially with such a strong dollar. 

U.S. Employers add 215,000 jobs in July  – unemployment rate remains at 5.3% -  The Labor Department reported that US employers added 215,000 net non-farm new jobs in July.  Every sector showed modest job growth gains with the exception of the energy sector which lost 4,000 jobs in July. The energy sector has lost 75,000 jobs so far in 2015 due to falling oil prices. Average hourly wages were up 5 cents an hour to $25.99. This was good news after a 1 cent per hour drop in June. Weak wage growth has been a drag on the economy. Last week The Labor Department reported that wage growth in the second quarter of 2015 was the slowest pace of wage growth in a quarter since 1982. Fortunately, the third quarter appears to be starting off with a better pace. ​​

Economic update for the week ending July 31, 2016

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​Mortgage Rates drop in July  –  The 30 year fixed rates ended the month around 3.875% for loans up to $417,000, and around 4.00% for loans over $417,000.  The 15 year fixed rate loans are about 3.125% for loans up to $417,000, higher loan amounts have rates that are around 3.375%. 5 Year-ARM rate is around3.00% and 1 Year-ARM mortgages are around 2.50%.

Home prices continue to rise –  Core Logic reported that the median price of a single family home in California rose 3% in June to $417,000. This represents a 7% rise in the median price from last June. The median price is the point at which ½ the homes sell for more and ½ the homes sell for less. It’s really not an indication of any particular home or neighborhood, but it is the only official measure of home price comparisons. It is a good indication of trends. We have seen the higher priced markets have stronger price gains, so our markets have prices rising at a greater rate than markets at the price level of the median price.  The California Association of Realtors reported that ( average price, a measurement that is not commonly used) home values were up 2.2% in June from May and 10.1% from June 2014. The average price in California was $634,190, according to the CAR.

​California pending existing home sales continue to increase -  The California Association of Realtorsreported that June pending home sales were up 12.5% on an annual basis from June 2014. This marked the7th straight month of increased sales numbers and the 5th straight month of double-digit  gains. Month over month California as a whole saw fewer sales in June than in May, but Southern California pending home sales were up 4% in June from May.  

U.S. Resale home sales jump - The National Association of Realtors reported that the number home sales of existing homes jumped in June to an 8 year high.

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Economic update for the week ending July 24, 2016

​Mortgage rates unchanged this week –   The 30 year fixed rates ended the week around 4.10% for loans up to $417,000, and around 4.25% for loans over $417,000.  Jumbo loans are about the same as new FNMA and Freddie Mac fees kept conforming rate loans from falling with treasury bonds the last couple of weeks. Jumbo loans over $625,500 are not subject to increased fees. The 15 year fixed rate loans are about 3.375% for loans up to $417,000, higher loan amounts have rates that are around 3.50%. 5 Year-ARM rate is around 3.00% and 1 Year-ARM mortgages are around 2.75%.

California pending existing home sales continue to increase -  The California Association of Realtors reported that June pending home sales were up 12.5% on an annual basis from June 2014. This marked the 7th straight month of increased sales numbers and the 5th straight month of double-digit  gains. Month over month California as a whole saw fewer sales in June than in May, but Southern California pending home sales were up 4% in June from May.  

Weekly jobless claims lowest since 1973 - The Labor Department reported that the number of U.S. workers filing initial applications for jobless benefits fell by 26,000 to a seasonally adjusted 255,000 in the week ended July 18, a 41-year low. The week coincides with the period the Labor Department conducts surveys to assess the strength of the labor market for the month of July. The most recent jobless-claims report shows how the job market has healed from the fragility of six years ago, when nearly 600,000 Americans a week were seeking such assistance. The low number of layoff has some economists optimistic that hiring will strengthen further this summer.

Economic update for the week ending July 18, 2016

​Mortgage rates unchanged this week –   The 30 year fixed rates ended the week around 4.10% for loans up to $417,000, and around 4.25% for loans over $417,000.  The 15 year fixed rate loans are about 3.375% for loans up to $417,000, higher loan amounts have rates that are around 3.50%. 5 Year-ARM rate is around 3.00% and 1 Year-ARM mortgages are around 2.75%.
 
California adds 22,900 jobs in June –  The Employment Development Department reported that employers added 22,900 non-farm jobs in June. California’s unemployment rate dropped to 6.3% in June from 6.4% in May. The unemployment rate was 7.5% last June. Although the state’s unemployment rate was 4.8% before the recession in 2006, California, the world’s eighth largest economy’s job growth has expanded 13.5% since the recession ended.  U.S. job growth rose 9.4% since the end of the recession. The national unemployment rate is currently 5.3%. Unfortunately, California lost a higher percentage of jobs than the nation during the recession, but the state is on the right track adding jobs at a higher rate than the nation as a whole.

Housing starts continue to rise –  The Commerce Department reported that housing starts in June rose 9.8%. they also reported a surge in multifamily construction which was up 28.6 %. This accounted for the majority of the 9.8% overall rise in housing starts.

Home prices continue to rise –  Core Logic reported that the median price of a single family home in California rose 3% in June to $417,000. This represents a 7% rise in the median price from last June. The median price is the point at which ½ the homes sell for more and ½ the homes sell for less. It’s really not an indication of any particular home or neighborhood, but it is the only official measure of home price comparisons. It is a good indication of trends. We have seen the higher priced markets have stronger price gains, so our markets have prices rising at a greater rate than markets at the price level of the median price.  The California Association of Realtors reported that ( average price, a measurement that is not commonly used) home values were up 2.2% in June from May and 10.1% from June 2014. The average price in California was $634,190, according to the CAR.

The number of existing home sales continue to gain strength – Core Logic reported that same month, year over year  home sales rose in June for the 4th straight month. Statewide an estimated 46,095 resale homes changed hands which represents an increase of 10.8%  from the number of homes sold in May and a16.8% increase from June 2014. This rise in sales was despite  a tight supply of inventory. The California Association of Realtors reported that home inventory levels had dropped to a 3.7 month supply in June from a 4 month supply in May. A 7 month supply is considered a normal market. Homes are hitting the market in higher numbers than a year ago, but many are selling quickly, which has not allowed the unsold numbers to increase.

Economic update for the week ending July 9, 2016

Mortgage Rates end week the same as last Friday –  After dropping almost a quarter of a percent by Wednesday, rates rose nearly a quarter percent on Thursday and Friday to end the week back were they were last week. The 30 year fixed rates ended the month around 4.10% for loans up to $417,000, and around 4.375% for loans over $417,000.  The 15 year fixed rate loans are about 3.375% for loans up to $417,000, higher loan amounts have rates that are around 3.50%. 5 Year-ARM rate is around 3.00% and 1 Year-ARM mortgages are around 2.75%.

Federal Reserve gives mixed messages - Minutes released Wednesday from the Fed's June meeting showed that just one of the ten voting members were in favor of raising interest rates.        With strong job gains and unemployment at a 7 year low it is widely felt a rise is coming.  The report indicated that the Fed wanted to wait and see what effect a Greece default,  slowing in Europe, a significant drop in the Chinese stock market, and a strong dollar would have on growth here at home. Earlier in the year there were more voting members in favor of a rate hike than there were in the June meeting. Rates dropped on bonds and mortgages after the report was released. Friday Fed Chairperson, Janet Yellen in a speech in Cleveland said, " it will be appropriate at some point later this year to take the first step to raise the federal funds rate and thus begin normalizing monetary policy." This statement caused bond and mortgage rates to rise. The Federal Funds Rate has been near zero for 7 years in an attempt to stimulate the economy. The last time the Fed rose rates was 2006.

Economic update for the week ending July 2, 2016

​New home sales hit 7 year high – The Commerce Department reported that new home sales in May jumped 2.2% from April to a seasonally adjusted annual rate of 546,000 units. This marked the highest level of new home sales in 7 years. New home builders said that fears of higher interest rates contributed to buyer demand, as buyers rushed to lock in rates before they increase further later in the year.

U.S. home resales jump 5.1% - Prices continue to rise - The National Association of Realtors reported that sales of previously owned homes jumped 5.1% in May from April figures. This was a strong number which beat analysts’ expectations. One comment that was made by Lawrence Yun, the chief economist at NAR, was, “ Strong job growth for young adults and low down-payment programs are helping more young buyers enter the marketplace. The return of first time buyers in May is an encouraging sign.” The median price also showed strength rising 7.9% from one year ago for the nation as a whole. The median price in the west grew 10.2% from a year earlier and 4.3% from April.

Pending home sales hits highest level in 9 years – The National Association of Realtorsreported that homes under contract rose again in May to their highest level since April 2006. The index has increased for nine consecutive months on a year over year comparison. A sign of how robust the real estate market is.

Resale home sale pace continues to exceed last year - The California Association of Realtors reported that statewide home sales of existing single-family homes totaled 423,360 in May on a seasonally adjusted annualized rate. That was down 1.1% from April, but up 8.9% from May 2014. It was the second straight month that statewide sales were above the 400,000 annualized mark. Last year we saw sales below the 400,000 sales mark, which was about 14% below the rate of an average year since 1988. This year we are still below average sales rates, but much closer than last year. Low inventory is one factor that is keeping sales numbers down. CAR reported that there is just a 3.5 month supply of homes on the market. A 6 to 7 month supply is a normal market. 

Home prices continue to rise - The California Association of Realtors reported that the median price paid for a resale home in California increased 0.8% in May from April, and 4.4% from May 2014. While price gains are moderating from double digit gains seen in 2012, 2013, and the beginning of 2014, they are still increasing. CAR also released more local statics. Los Angeles County had prices up 1.3% from April and 5.1% from last May. Ventura County had prices up 3.7% from April and 8.2% from last May. Orange County had prices up 1.8% from April and just 2.8% from last May. 

U.S. Producer prices record their biggest increase in 2 1/2 years - The Labor Departmentsaid its producer price index for final demand increased 0.5% in May,  the largest gain since September 2012. Much of the gain was due to rising gas and food products. 

Retail sales jump - The Commerce Department reported Thursday that retail sales jumped 1.2% in May. This was encouraging news which

beat expectations and showed that Americans sharply stepped up their spending despite harsh weather. 

Economic update for the week ending June 27, 2016

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​Mortgage Rates higher than last week–  The 30 year fixed rate ended the week around 4.30% for loans up to $417,000, around 4.50% for loans between $417,000 and $625,500.  The 30 year fixed rates on jumbo loans, loans over $625,500,  are about4.625%. The 15 year fixed rate loans are about 3.375% for loans up to $417,000, around 3.50% for loans between $417,000 and $625,500, and around 3.675% for loans over $625,500. The 5 Year-ARM rates are around 3.25% 1 Year-ARM mortgages are around 2.75%.

U.S. Consumer Confidence Rises – The University of Michigan reported that theirconsumer sentiment index rose from 90.7 in May to 96.1 in June. This was the highest level since January when the rating of 98.1 shocked experts. That was the highest rating in more than a decade. Last June the index was 82.5. For the first 6 months of 2015 consumer sentiment has improved at the highest pace since 2004. This increase is important because it suggest that consumer spending, which accounts for a majority of the economy, will continue to increase.

New home sales hit 7 year high – The Commerce Department reported that new home sales in May jumped 2.2% from April to a seasonally adjusted annual rate of 546,000 units. This marked the highest level of new home sales in 7 years. New home builders said that fears of higher interest rates contributed to buyer demand, as buyers rushed to lock in rates before they increase further later in the year.

U.S. home resales jump 5.1% - Prices continue to rise - The National Association of Realtors reported that sales of previously owned homes jumped 5.1% in May from April figures. This was a strong number which beat analysts’ expectations. One comment that was made by Lawrence Yun, the chief economist at NAR, was, “ Strong job growth for young adults and low down-payment programs are helping more young buyers enter the marketplace. The return of first time buyers in May is an encouraging sign.” The median price also showed strength rising 7.9% from one year ago for the nation as a whole. The median price in the west grew 10.2% from a year earlier and 4.3% from April.

Next Friday the Labor Department will release the June employment report. A high number will show that the economy is continuing to improve. An improving economy puts pressure on the Federal Reserve to raise its benchmark rate which has been near zero since 2008 in an effort to lift the nation out of recession.  There has not been an interest rate hike since 2006. Expect mortgage rates to rise with a high number and to fall with a low number of jobs created.

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Economic update for the week ending June 18, 2016

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​Mortgage Rates slightly lower than last week–  The 30 year fixed rate ended the week around 4.125% for loans up to $417,000, around 4.325% for loans between $417,000 and $625,500, and 4.375% for loans over over $625,500. The 15 year fixed rate loans are about 3.25% for loans up to $417,000, around 3.375% for loans between $417,000 and $625,500, and around 3.50% for loans over $625,500. The 5 Year-ARM rates are around 3.10% 1 Year-ARM mortgages are around 2.60%.

Resale home sale pace continues to exceed last year - The California Association of Realtorsreported that statewide home sales of existing single-family homes totaled 423,360 in May on a seasonally adjusted annualized rate. That was down 1.1% from April, but up 8.9% from May 2014. It was the second straight month that statewide sales were above the 400,000 annualized mark. Last year we saw sales below the 400,000 sales mark, which was about 14% below the rate of an average year since 1988. This year we are still below average sales rates, but much closer than last year. Low inventory is one factor that is keeping sales numbers down. CAR reported that there is just a 3.5 month supply of homes on the market. A 6 to 7 month supply is a normal market. 

Home prices continue to rise - The California Association of Realtors reported that the median price paid for a resale home in California increased 0.8% from April and 4.4% from May 2014. While price gains are moderating from double digit gains seen in 2012, 2013, and the beginning of 2014, they are still increasing. CAR also released more local statics. Los Angeles County had prices up 1.3% from April and 5.1% from last May. Ventura County had prices up 3.7% from April and 8.2% from last May. Orange County had prices up 1.8% from April and just 2.8% from last May.

Economic update for the week ending June 13, 2016

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Mortgage Rates unchanged from last week–  The 30 year fixed rate ended the week around 4.25% for loans up to $417,000, and around 4.38% for loans between $417,000 and $625,500 and 4.50% for loans over over $625,500. The 15 year fixed rate loans are about 3.38% for loans up to $417,000, and around 3.50% for loans between $417,000 and $625,500, and around 3.625% for loans over $625,500. The 5 Year-ARM rates are around 3.10% 1 Year-ARM mortgages are around 2.60%.

Consumer confidence jumps - The University of Michigan consumer sentiment index rose to 94.4 in early June from 90.7 in May.  They reported that U.S. consumer confidence surged in early June on expectations that a tightening labor market would spur wage gains, which could further stimulate spending and overall growth later this year. They found that consumers were the most favorable about their personal financial prospects since 2007, with households expecting the largest wage gains since 2008. This rise in consumer sentiment came despite a rise in gas prices, which contributed to the largest rise in producer prices in 2 1/2 years. Strong consumer confidence, together with a tightening labor market, bullish retail sales and firming inflation pressures

caped off a week of strong economic data.

Economic update for the week ending June 6, 2016

Mortgage Rates increase at least 1/4% this week –  The 30 year fixed rate ended the week around 4.25% for loans up to $417,000, and around 4.25% for loans between $417,000 and $625,500 and 4.625% for loans over over $625,500. The 15 year fixed rate loans are about 3.50% for loans up to $417,000, and around 3.50% for loans between $417,000 and $625,500, and around 3.625% for loans over $625,500. The 5 Year-ARM rates are around 3.20%. 1 Year-ARM mortgages are around 2.70%. 

Consumer debt surges in April - The Federal Reserve reported that consumer borrowing expanded by $20.5 billion in April, up 6.6% from last April. Strong gains over the last few months pushed consumer debt to a new record, $3.38 trillion. Credit card debt rose $8.6 billion, the largest gain in 12 months. Economists expect that consumers, who have seen strong job gains, will keep borrowing and spending in the coming months, which will help boost economic growth. 

Fed says economy growing at a moderate rate - The Federal Reserve released its Beige Book Survey which includes business conditions throughout the country. They said the economy is growing at a moderate pace. They reported that : Consumers have ramped up spending at retailers and auto dealers.  Manufacturing activity has held steady or increased in all regions with the exception of the energy industry. Tourism has picked up in much of the country. 

Strong economic news causes stocks drop on fears of higher interest rates - Fears of rising interest rates rattled the markets this week. Early in the week it was reported that inflation had picked up in Europe. Germany raised its benchmark rate. U.S. Exports were stronger than expected in April. An upbeat outlook was released by The Fed which showed the economy gaining steam, after a disappointing winter. All this "good news" led to higher bond yields, as experts expect a rate rise by The Fed coming. Friday's jobs report caused bond yields and mortgage rates to rise further. Higher rates cut into corporate profits, as corporate debt becomes more expensive. The Dow Jones Industrial Average closed the week at 17,849.46, down from 18,010.68 last week. The Nasdaq closed at 5,068.46, down slightly from 5,070.03 last Friday. The S&P 500 closed

at 2,092.83, also down from last Friday's close of 2,107.03.

Economic update for the week ending May 30, 2016

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​Pending home sales at 9 year high - The National Association of Realtors said Thursday that its index of pending home sales climbed in April to the highest level in 9 years. April marked the fourth straight month of increases of homes under contract. With such low inventory it was feared that the number of homes sold would begin to cool. That has not materialized. Homes are selling at a pace in which unsold homes on the market is still decreasing. The number of homes coming on the market has increased. They also forecasted that prices would rise 8% (annualized) in the second quarter after an annualized 6.2% rise in the first quarter. They also expect prices to stabilize in the third and fourth quarters, ending the year up 6% year over year.

U.S. new home sales climb 6.8% - The Commerce Department said Tuesday that new home sales increased at an annualized rate of  6.8% in April. The annual pace of new housing starts (construction permits) also jumped 20.2%from March. This was in line with a similar trend in California reported last week.

Mortgage Rates  –  The 30 year fixed rate ended the week around 4.00% for loans up to $417,000, and around 4.25% for loans over $417,000.  The 15 year fixed rate loans are about 3.25% for loans up to $417,000, and around 3.50% for loans over $417,000. The 5 Year-ARM rates are around 3.00%.  1 Year-ARM mortgages are around 2.50%.  Last week's Freddie Mac Primary Mortgage Survey showed rates as follows: 30 year fixed rates at 3.87%, 15 year fixed at 3.11%, 5/1 YR ARM at 2.90%and 1 YR ARM at 2.50%.

​​Economic update for the week ending May 23, 2016

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​​​Housing Starts rise 20% in April – The Commerce Department reported Tuesday that privately owned housing starts increased in April 20.2% from March. The level was the highest since November 2007.Building permits which is a good gage of future construction also increased 10.1% from March to the highest level since June 2008.

Mortgage Rates  –  The 30 year fixed rate ended the week around 4.00% for loans up to $417,000, and around 4.25% for loans over $417,000.  The 15 year fixed rate loans are about 3.25% for loans up to $417,000, and around 3.50% for loans over $417,000. The 5 Year-ARM rates are around 3.00%.  1 Year-ARM mortgages are around 2.50%.  Last week's Freddie Mac Primary Mortgage Survey showed rates as follows: 30 year fixed rates at 3.84%. 15 year fixed at 3.05%. 5/1 YR ARM at 2.88% and 1 YR ARM at 2.51%.

Economic update for the week ending May 16, 2016

Mortgage Rates  –  The 30 year fixed rate ended the week around 4.00% for loans up to $417,000, and around 4.25% for loans over $417,000.  The 15 year fixed rate loans are about 3.25% for loans up to $417,000, and around 3.50% for loans over $417,000. The 5 Year-ARM rates are around 3.00%.  1 Year-ARM mortgages are around 2.50%.  Last week's Freddie Mac Primary Mortgage Survey showed rates as follows: 30 year fixed rates at 3.85%. 15 year fixed at 3.07%. 5/1 YR ARM at 2.89% and 1 YR ARM at 2.48%.

Bond yields were volatile this week   -  The 10 year U.S. Treasury Bond, which got as high as 2.30% early in the week closed the week at a 2.14% yield, almost unchanged from 2.16%  last week.  The 30 year U.S. Treasury Bond closed Friday yielding 2.93%, also unchanged from 2.90%  last Friday. The 30 year treasury yield reached 3.10% on Wednesday. Yields dropped considerably on Friday following a weak consumer confidence report.

Economic update for the week ending May 9, 2016

Mortgage Rates  –  The 30 year fixed rates ended the week around 4% for loans up to $417,000, and around 4.25% for loans over $417,000.  The 15 year fixed rate loans are about 3.25% for loans up to $417,000, higher loan amounts have rates that are around 3.5%. 5 Year-ARM rates are around 3% and 1 Year-ARM mortgages are around 2.5%. Last week's Freddie Mac Primary Mortgage Survey showed 30 year fixed rates at 3.8%. 15 year fixed at 3.2%. 5/1 YR ARM at 2.9% and 1 YR ARM at 2.46%. This survey is done early in the week and reflects mostly the prior weeks rates. ​

U.S. Economy adds 233,000 jobs in April - The Labor Department released the April jobs report that showed  233,000 non farm jobs were added to the economy in April. This was a sign of relief after a disappointing March, which was revised downward to just 85,000 jobs. March's disappointing number has been blamed on weather and it is expected that job growth will continue at healthy levels. The unemployment rate fell slightly to 5.4%, it's lowest level since May 2008. Wage growth, finally showing signs of picking up, was up 2.2% on an annual basis which was a little better than expected. Hiring was strong in many industries with the exception of energy. About 15,000 energy jobs were lost in April, which included oil drilling and coal mining. That brings energy related job losses to over 45,000 year to date as a result of low oil prices. Fortunately, other sectors did quite well. Business services added 62,000 jobs. Constriction and health care each added 45,000 jobs in April.

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Economic update for the week ending May 1, 2016

Existing home sales and prices Jump in March - The California Association of Realtors reported that the number of existing homes sold in March increased 6.3% from February. Year over year home sales were 7.3% above last March. C.A.R. also reported that the statewide California median home price in March increased 9.2% from February. Existing home sales include single family homes, condos, mobile homes, and co-ops. They also reported that the unsold inventory index dropped from a 5 month supply in February to a 3.8 month supply in March. A 6-7 month supply is considered a normal market. The National Association of Realtors reported that March US home sales were up 6.1% month over month from February and 10.4% year over year from last March. The Case-Schiller Home Price Index reported that Los Angeles home prices rose 5.8% year over year in March. Case-Schiller tracks 20 major cities in its index report.

Mortgage Rates rise about ¼% in April  –  The 30 year fixed rates ended the month around 4% for loans up to $417,000, and around 4.25% for loans over $417,000.  The 15 year fixed rate loans are about 3.25% for loans up to $417,000, higher loan amounts have rates that are around 3.5%. 5 Year-ARM and 1 Year-ARM mortgages are both around 2.8%.

​​Economic update for the week ending April 25, 2016

U.S. Home Sales up 6.1% in March - The National Association of Realtors reported that the number of existing home sales increased 6.1% in March from February. The number of homes sold were also 10.4% higher than last March. The number of homes sold in March marked the highest level since September 2013 and the month over month increase was the largest increase since December 2010. 

Pending sales jump for third straight month in California - The California Association of Realtors reported that the number of pending home sales, homes under contract, increased 16.3% from February. Year over year home sales are up 13.8% from March 2014. 

New home sales plunge in March - The number of new homes sold in the U.S. unexpectedly dropped in March. The number of new homes sold in March was 11.4% below February's home sales level. Most of the drop in new home sales occurred in the northeastern portion of the country where sales declined over 33%.

​​Economic update for the week ending April 19, 2016

The number existing home sales increases in March - The California Association of Realtors reported that the number of existing homes sold in California increased 6.3% in March from February and were 7.3% higher than last March. In Los Angeles County the number of sales were up 33.8% in March from a disappointing February and up 7.6% from last March. Ventura County numbers were even better with the number of homes sold in March up 42%from February and 23.5% from last March! Orange County home sales were up 45.7% from February and 13.8% from March 2014.

Home prices increase in March - The California Association of Realtors reported that the median price paid for an existing home in California in March was $468,850, up 9.2% from February's median price of $428,970, and up 7.2%year over year from $437,100 in March 2014. Los Angeles County's median price paid for an existing home was$425,860, up 1.6% from February's $419,260, and up 7.6% from $395,660 last March. Ventura County's median price was $596,890, up 4.9% from $568,840 in February and up 6.7% from $559,320 in March 2014. Orange County'smedian price was $696,060, up 2.3% from $680,290 in February and up 3% from last March's median of $675,540.  The C.A.R. figures are derived from sales reported to multiple listing services throughout the state. The median price is the point at which half the homes sell for more and half for less. Most homes in our markets are well over the median price level,  but the median price is the only statistical method used in price reporting by The C.A.R. and other data reporting providers. 

Fewer homes on the market in March - The California Association of Realtors' Unsold Inventory Index showed that the number of homes on the market dropped from a 5 month supply in February to a 3.8 month supply in March.Los Angeles County had a 3.9 month supply in March, down from a 5.2 month supply in February. Ventura County had a 4.5 month supply in March and a 5.8 month supply in February. Orange County had a 3.7 month supply in March, down from a 5.1 month supply in February. A six to seven month supply is considered a normal market. 

​​Economic update for the week ending April 12, 2016

New home sales jump 17% in March - The Mortgage Bankers Association's Builder Application Survey revealed that new home purchases increased 17% in March from February. For the first quarter of 2015 mortgage applications for new homes were up 20% from the first quarter of 2014, according to the report.

​Mortgage Rates remain stable for third week –  The 30 year fixed rates are around 3.8% for loans up to $417,000 and slightly above 4.0% for loans over $417,000.  15 year fixed loans are about 3% for loans up to $417,000 and about 3.25% for higher loan amounts. The Freddie Mac Primary Mortgage Survey which comes out early in the week reported that the 30 year fixed mortgage rate average for the week was 3.66%. It was 3.70% last week. The 15 year fixed was 2.93%. It was 2.98% last week. The 5 year ARM was 2.83% and the 1 year ARM was 2.46%.  Rates may rise a little next week, as they usually rise when bond yields rise, as they did at the end of the week. On the other hand, disappointing first quarter earnings results, which could very likely happen, will cause rates to fall. It's going to be an interesting week!

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​Economic update for the week ending April 4, 2016

Mortgage Rates remain stable for second week –  The 30 year fixed rates are around 3.75% for loans up to $417,000 and about 4.0% for loans over $417,000.  15 year fixed loans are about 3% for loans up to $417,000 and about 3.25% for higher loan amounts. The Freddie Mac Primary Mortgage Survey which comes out early in the week reported that the 30 year fixed mortgage rate average for the week was 3.70%, about the same as 3.69% last week. The 15 year fixed was 2.98% pretty much unchanged from last week's 2.97%. The 5 year ARM was 2.92% and the 1 year ARM was 2.46%.

California's unemployment rate falls to lowest level in 7 years - The state's unemployment rate in February dropped to 6.7%, down from 6.9% in January. The state's unemployment rate was 8% last February. March won't be released until the end of April. It will be interesting to see if the March numbers are much lower than the February numbers statewide, as compared to the national numbers for the same time period.

​Economic update for the week ending March 29, 2016

Mortgage Rates remain stable this week –  The 30 year fixed rates are around 3.75% for loans up to $417,000 and about 4.0% for loans over $417,000.  15 year fixed loans are about 3% for loans up to $417,000 and about 3.25% for higher loan amounts. The Freddie Mac Primary Mortgage Survey which comes out early in the week reported that the 30 year fixed mortgage rate average for the week was 3.69%, down from  3.78% last week. The 15 year fixed was 2.97, down from last week's 3.06%. The 5 year ARM was 2.92% and the 1 year ARM was 2.46%.

New construction sales hits 7 year high - The Commerce Department reported that new home sales in February jumped 7.8% from January's level, and were 24.8% higher than last February. For the month, new homes sold at a seasonally adjusted annual rate of 539,000, the highest level in 7 years. 

Nationally home prices are below the peak in 2007, interest rates are lower and incomes are higher than 2007. The home affordability index shows homes are more affordable than in 2007. Many of our local markets have home prices much higher than they were at the peak in 2007, especially our higher priced areas. Our markets which include homes closer to the median price still have home prices below the 2007 levels, but they have moved up sharply since hitting bottom a few years ago. I'd think prices will continue to rise for at least another couple of years. 

Economic update for the week ending March 22, 2016

Home prices continue to rise - Data Quick reported that the median price paid for a home in California in February was $378,000, up 0,5% from January's $376,000. Year over year the median price was up 6.5% from $355,000 in February 2014. February marked the 36th consecutive month that the state's median price increases on a year over year basis. 

Mortgage Rates drop over 1/8% this week  –  The 30 year fixed rates are around 3.75% for loans up to $417,000and about 4.0% for loans over $417,000. 15 year fixed loans are about 3% for loans up to $417,000 and about 3.25% for higher loan amounts. The Freddie Mac Primary Mortgage Survey which comes out early in the week reported that the 30 year fixed mortgage rate average for the week was 3.78% which was lower than last week's 3.86%. The 15 year fixed was 3.06% which was slightly lower than last week's 3.10%. The 5 year ARM was 2.97% and the 1 year ARM was 2.46%.

California jobless rate falls to 6.7% - California employers added 29,400 workers in February dropping the state's unemployment rate to 6.7%, the lowest level in 7 years. One year ago the unemployment rate in California was 8%. Over the last year the state has outpaced the nation in both job growth and wage growth.

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Economic update for the week ending March 14, 2016

Mortgage Rates  –  The 30 year fixed rates are around 4% for loans up to $417,000. They are about 4.25% for loans over $417,000. 15 year fixed loans are about 3.2% for loans up to $417,000 and about 3.5% for higher loan amounts. The Freddie Mac Primary Mortgage Survey which comes out early in the week reported that the 30 year fixed mortgage rate average for the week was 3.86% which was higher than last week's 3.75%.  The 15 year fixed was 3.10% which was also higher than last week's 3.03%. 

Treasury Bond yields settle this week after large increases over the last few weeks – The 10 year Treasury bond closed the week at 2.13%, down from 2.25% last week. The 10 year was  1.68% on January 30. The 30 year treasury yield ended the week at 2.70%, down from 2.84% last Friday. 

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Stock markets down for third straight week -  A steep drop in oil prices and a jump in the value of the dollarcaused another sell off of stocks this week. Investors already fearful of future interest rate hikes' affects on corporate profits got more bad news this week. Falling oil prices caused energy company shares to fall. Oil prices hit a 5 year low on Friday.

​Upcoming Federal Open Market Committee meeting - On March 18, at 2 PM Federal Reserve Chairperson, Janet Yellen will make a statement on the Federal Open Market Committee's stance on interest rates. While it is not believed that any increase in rates would be made before the June meeting the language in the statement is expected to potentially move the market.

Upcoming Federal Open Market Committee meeting - On March 18, at 2 PM Federal Reserve Chairperson, Janet Yellen will make a statement on the Federal Open Market Committee's stance on interest rates. While it is not believed that any increase in rates would be made before the June meeting the language in the statement is expected to potentially move the market.

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Economic update for the week ending March 7, 2016

Mortgage Rates rose .25% yesterday –  The 30 year fixed rates rose to 4% for loans up to $417,000 and well over 4.25% for loams over $417,000. It was the largest one day rise I can remember. The 15 year fixed rates also rose about ¼% yesterday. They are about 3.3% for loans up to $417,000 and about 3.5% for higher loan amounts. The Freddie Mac Primary Mortgage Survey which comes out early in the week reported that the 30 year fixed mortgage rate average for the week was 3.75% below last week’s 3.80%. The 15 year fixed was 3.03% about the same as last week’s 3.07%. Next week’s rates will be significantly higher due to yesterday’s rise.  

U.S. employers added 295,000 jobs in February- Unemployment Rate drops to a post- Great Recession low of 5.5%. – the Labor Department released the February Jobs Report Friday which showed that employers added 295,000 jobs.  February marked the 12th straight month of job gains above 200,000.Hourly wages were up just 3  cents an hour after jumping 13 cents in January. Year over year hourly wages were up only 2% which tempered the report. The number of jobs were expected to be in the 230,000 range. Immediately after the report was released stocks plunged, and interest rates rose sharply as fears of a rate hike by the Federal Reserve rocked the investment world. The Federal Reserve has kept short term rates at or near 0% in order to improve the job market. 12 months of job gains above 200,000 is the longest job growth streak since 1994-1995. The unemployment rate dropped from 5.7% to 5.5%, its lowest level since May 2008.

​​Economic update for the week ending February 27, 2016

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​Mortgage Rates rise for the month, yet still below rates of one year ago – The Freddie Mac Primary Mortgage Survey reported that the 30 year fixed mortgage rate average for the week was 3.80%, up from 3.66% the last week of January. The 15 year fixed was 3.07%, also higher than 2.98% the last week of January. The 5 year ARM was 2.99%, up from 2.86% at the end of January.  The 1 year ARM was 2.44%, also higher than 2.38% at the end of January.  These rates were for loans up to $417,000. Higher loan amounts, also called jumbo loans, have rates about 1/4% higher. Most of our loans in our markets arejumbo sized loans which are running just above 4% on 30 year fixed loans, and around 3.375% on 15 year loans. Rates were higher last week, so at least they ended the month trending lower.

​U.S. pending home sales  shows that home sales rose in January -  The National Association of Realtors reported that its home sales index showed a sales increase of 1.7% in January from December. The index was up 8.4% from one year ago. It should be noted that closed sales were down 0.2%  in January.

​Economic update for the week ending February 21, 2016

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​Mortgage Rates continue to rise, up 1/2% this month - The Freddie Mac Primary Mortgage Survey reported that the 30 year fixed mortgage rate  average for the week was 3.76% up from 3.69%, last week. The 15 year fixed was 3.05%, up from 2.99% last week. The 5 year ARM was 2.97%.  The 1 year ARM was also up at 2.45%.  The survey runs about a week behind. Rates rose  as bond yields rose throughout the week.  All  rates rose  this week. Conforming rates are close to 4% for 30 year terms and 3.25% for 15 year mortgages. Next week's survey should reflect these higher rates. Jumbo size loans are about .25% higher than conforming. Rates have risen .5% this month so far!

Home prices up but number of sales down - Data quick reported that the January 2015 number of homes and condominiums  sold in California were down 30.6% from the number of single family homes sold (closed) in December.The median price was up 6.5% compared to last January marking the 35th consecutive month of year over year price increases. The Southern California region had the median sales price up by 7.6% year over year.Foreclosure and short sales accounted for just about 6% of sales each. Foreclosure sales reached a peak of 56.7% of sales in February 2009. Cash sales accounted for 24.5% of all sales. 

Stocks hit record highs on positive worldwide economic news - The DOW Jones Industrial Average closed at a record high, the first of the year. The S&P 500 closed at its 3rd record high for the year, and the Nasdaq closed at a 15 year high. A Greek debt deal and rising oil prices, as well as more positive news both at home and abroad led stocks to rise. The Dow Jones Industrial Average closed the week at 18,140.44, a record high, up from 18,018.35 last week and up  about 1,000 points from 17,164.95 three weeks ago.  The S&P 500 closed the week at 2,110.30 well above last week's close of 2,069.99. It was 1,994.99  three weeks ago. The Nasdaq closed at 4,955.97 also higher than 4,893.84 last Friday. The Nasdaq was 4,635.24  three weeks ago.  It's been an incredible month for stocks. ​

​Economic update for the week ending February 13, 2016

Mortgage Rates continue to rise- The Freddie Mac Primary Mortgage Survey reported that the 30 year fixed mortgage rate average for the week was 3.69%, up from last week's 3.59%. The 15 year fixed was 2.99%, up from  2.92% last week. The 5 year ARM was 2.97%, up from last week's 2.82%.  The 1 year ARM was also up at 2.42% from 2.39% last week.  The survey runs about a week behind. Rates rose  as bond yields rose throughout the week.  All  rates rose  this week. The survey will be closer to 3.8% next week for a 30 year fixed. While still under 4% conforming and just slightly over 4% for jumbo sized 30 year mortgages rates are still great, but about 0.375% higher than near all times lows couple of weeks ago.

Treasury Bond yields continue to rise – The 10 year Treasury bond closed the week at 2.05%, up from last week's close of 1.95%, and up  from 1.68% two weeks ago. The 30 year treasury yield was 2.63% which was up from last week's close of 2.51% and 2.25% two weeks ago. 

California Association of Realtors' report home affordability up slightly in fourth quarter - The California Association of Realtors released it's housing affordability index on Thursday. It showed that affordability improved in the fourth quarter of 2014 over the third quarter, but declined from the 4th quarter of 2013.

Economic update for the week ending February 6, 2016

​Mortgage Rates begin week near historic lows yet raise sharply to end the week.– The Freddie Mac Primary Mortgage Survey reported that the 30 year fixed mortgage rate average for the week was 3.59%,  down from last week's 3.66%. The 15 year fixed was 2.92%, which was down from 2.98% last week. The 5 year ARM was 2.82% The 1 year ARM was 2.39%  Unfortunately, the survey runs about a week behind. Rates rose sharply as bond yields rose throughout the week.  All  rates rose about .25% this week. The survey will be closer to 3.75% next week for a 30 year fixed. While still under 4% conforming and just slightly over 4% for jumbo sized 30 year mortgages rates are still great, but much higher than last week.

Stock markets rebound to make up nearly all losses for the year after finishing down for 6 out of the last 7 weeks! – Better economic news caused a rally in stocks this week. Among the highlights were: Auto sales in January were up to the highest January level in 9 years with the best percentage increase in 7 years. This caused auto stocks to rise and increased dividends paid. January job gains were healthy. Oil prices rose which helps oil stocks. The Dow Jones Industrial Average closed the week at 17,824.29, which was up from last Friday’s close of 17,164.95.  The S&P 500 closed the week at 2,055.47, up from 1,994.99  last Friday. The NASDAQ closed at 4,744.40 also up from 4,635.24  last week.

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​Economic update for the week ending January 30, 2016

​Mortgage Rates remain near historic lows – The Freddie Mac Primary Mortgage Survey reported that the 30 year fixed mortgage rate average for the week was 3.66% about the same as last week's 3.63%. The 15 year fixed was 2.98%, which was down from 2.93% last week. The 5 year ARM was 2.86% The 1 year ARM was 2.38%.  Rates dropped with stocks on Friday. Jumbo size loans have rates slightly higher yet still under 4% for a 30 year fixed, and about 3.25% on a 15 year fixed.

Consumer confidence reaches highest level in the past decade. The Thomson Reuters/ University of Michigan Survey reported that consumer optimism reached the highest level in the past decade in the January 2015 survey. Consumer sentiment measured 98.1, up from 93.6 in December. It was up 20.8% from the 81.1 measured last January 2014. January 2015 marked the highest consumer sentiment reading since it was 103.8 in January 2004. Consumers judged prospects for the national economy as the best in a decade, and half of all consumers expect that the economic expansion would continue for another 5 years, according to the survey. This report is an important gage because it is a way to forecast consumer spending, an important driver of the economy.

​Economic update for the week ending January 23, 2016

​Mortgage Rates remain near historic lows – The Freddie Mac Primary Mortgage Survey reported that the 30 year fixed mortgage rate average for the week was 3.63% about the same as last week's 3.66%. The 15 year fixed was 2.93%, which was down from 2.98% last week. The 5 year ARM was 2.83% The 1 year ARM was 2.37%.  Rates dropped with stocks on Friday. They were higher on Wednesday and Thursday. Jumbo rates are a little higher at just under 4% for a 30 year fixed, and about 3.25% on a 15 year fixed.

Economic update for the week ending January 17, 2016

​DataQuick reports that the median price rose in December for its 34th consecutive month over same month yearly increase! - The median price paid for a home in California in December was $383,000. This was up 1.8% from November's $381,000, and up 6.3% from last December's $365,000 median price. In Los Angeles County the median price was $460,000 which was 7% higher than last December's median price of $430,000.  Our markets have prices well above the median price levels, but this data does show trends and comes from an official source who uses recorded sales.

Holiday sales post biggest increase since 2011, yet below expectations. - The National Association of Retailersreported that retail holiday sales for November and December rose 4.1% from last year. That makes 2014 holiday sales it's largest increase in 3 years. They were expecting an increase closer to 5%.

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​Economic update for the week ending January 9, 2016

Mortgage Rates at 19 month low – The Freddie Mac Primary Mortgage Survey reported that the 30 year fixed mortgage rate average for the week was down to 3.73% from last week's 3.83%. This was the lowest the 30 year fixed has been since May of 2013.  The 15 year fixed was 3.05% which was down from 3.15% last week. The 5 year ARM was 2.98% The 1 year ARM was 2.39%. Jumbo rates are just slightly higher and under 4% for a 30 year fixed.

 Unemployment rate ends year at 5.6%, down from 6.7% one year ago! - U.S. adds 252,000 Jobs in December. -2014 posts the highest number of new jobs since 1999 – The U.S. Labor Departmentreleased its December jobs report Friday. It showed that U. S. employers added 252,000 jobs in December. The private sector added 240,000 while federal, state and local governments added 12,000. For the year the U.S. added 2.95 million jobs which is the highest number of jobs added in a year since 1999.

Economic update for the week ending January 2, 2016

Mortgage Rates – The Freddie Mac Primary Mortgage Survey reported that the 30 year fixed mortgage rate average for the week was 3.87% almost unchanged from last week's 3.83%. The 30 year fixed survey average was 4.53% on January 2, 2014! This represents a drop of almost 3/4%! The 15 year fixed was 3.15%, slightly up from last week's 3.10%. It was 3.55% last January 2! That's a drop of almost 1/2%. The 5 year ARM was 3.01%, it was 3.05 last January 2. The 1 year ARM was 2.40%, and 2.56% last January 2. Rates dropped later in the week so next week's survey should show slightly lower 30 and 15 year rates.

Economic update for the week ending  December 27, 2015

Stock markets reach record highs! DOW over 18,000! – The US stock markets closed at record highs! This was another great week of economic news. Highlighted by the best holiday sales in years, the highest consumer confidence rating in nearly 8 years, lower gas prices, an upgrade in the 3rd quarter GDP, and employment gains stocks reached record highs. The Dow Jones Industrial Average closed the week at 18,053.71up from last week's close of 17,804.8. The S&P 500 closed Friday at 2088.77 up from last week's close of 2,070.65. The NASDAQ closed at 4806.86 also above last week's close of 4,765.38.

Mortgage Rates – The Freddie Mac Primary Mortgage Survey reported that the 30 year fixed mortgage rate average for the week was 3.83%, about the same as last week's 3.8%. The 15 year fixed was 3.10%. It was 3.09% last week. The 5 year ARM was 3.01%. The 1 year ARM was 2.39%. Rates rose with stocks later in the week so next week's rates will be closer to 4% for the 30 year and 3.25% for a 15 year fixed.

Economic update for the week ending  December 19, 2015

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​ 2014 Stock markets post their biggest weekly increase in nearly two years to gain back last week’s largest decline in two years and more!  The Dow Jones Industrial Average closed the week at 17,804.8 up sharply from 17,280.83 last week. The S&P 500 closed Friday at 2,070.65 well above its close of 2,002.33  last Friday. The NASDAQ closed at 4,765.38 also sharply higher than last weeks close of 4,653.60.  

Treasury Bond Rates were slightly higher– The 10 year Treasury bond closed the week at 2.17% which was higher than the 2.10% close last week. The 30 year treasury yield was 2.77% about the same as 2.75% last week. As  The treasury yield is considered a benchmark rate as mortgages rates follow treasury trends.

​Mortgage Rates – The Freddie Mac Primary Mortgage Survey reported that the 30 year fixed mortgage rate average for the week was 3.8% down from 3.93% last week. The 15 year fixed was 3.09% down from 3.20% last week. Rates rose with stock later in the week so next week's rates will be closer to 4% for the 30 year and 3.25% for 15 year loans.

Mortgage Rates –  The Freddie Mac Primary Mortgage Survey reported that the 30 year fixed mortgage rate average for the week was 3.93% up from 3.89% last week. The 15 year fixed was 3.20% up form  3.10% last week. The 5 year ARM was 2.94% and the 1 year ARM was 2.41%. These rates are the weekly average compiled and published in the middle of the week.

FNMA and Freddie Mac have dropped down payment requirements to 3%- They are now offering financing with loan to values as high as 97%. They have also eased up on credit scores, and reserve requirements in order to make home lending more available.

​Economic update for the week ending December 6, 2015

Jobs - US economy adds 321,000 non farm jobs in November. The Highest single month of job gains since January 2012. The national unemployment rate remained unchanged at 5.8% from October as more workers entered the workforce. The unemployment rate was 7.2% one year ago. Year to date the economy has 2.6 million jobs which is the highest rate since 1999.

 Hourly wages were up 2.21% from one year ago at $24.66 per hour. Although not enough wages are up slightly above the inflation rate of just under 2%. Among the jobs added the following sectors had the largest gains: Retail sales added 50,000 jobs. Healthcare added 29,000 jobs, up 261,000 year to date. Food services added 27,000 jobs, up 321,000 year to date. Construction added 20,000 jobs, up 213,000 year to date. Transportation added 17,000 jobs, up 143,000 year to date. Financial services added 20,000 jobs, up 114,000 year to date. Manufacturing added 28,000 jobs, up 171,000 year to date. Another record breaking week for US stock indexes 

Mortgage Rates –  The Freddie Mac Primary Mortgage Survey reported that the 30 year fixed mortgage rate average for the week was 3.89% down from 3.97% last week. The 15 year fixed was  3.10%, down from 3.17% last week. The 5 year ARM was 2.94% and the 1 year ARM was 2.41%. These rates are the weekly average compiled and published in the middle of the week.

Economic update for the week ending November 22, 2015

Another record breaking week for US stocks  – The US stock markets posted their fifth straight week of gains with new highs, buoyed by positive economic news from Europe and China, and positive job gains at home. The Dow Jones Industrial Average closed the week at 17,810.06, up from last weeks close of 17,634.74. The S&P 500 closedFriday at 2063.50, up from last Friday’s close of 2039.82. 

Mortgage Rates –  The Freddie Mac Primary Mortgage Survey reported that the 30 year fixed mortgage rate average for the week was 3.99% down from  4.01%  last week. The 15 year fixed was also down at 3.17% from 3.2% last week.

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California gains 41,500 non-farm jobs – The California Employment Development Department reported that non-farm payrolls increased in October by 41,500 jobs.

Lower rates have led to more buyer demand. It seems like the number  of multiple offer situations have increased. I would not be surprised to see month over month prices to show an increase after being flat the past few months. It takes a while for escrows to close so I am looking for this increase to be reported in the December and January closings. We will wait and see!

​Home Sales – DataQuick reported that  the number of statewide home sales were up 1.4% in October from September, and up 1% from October 2013. Although slight,  it marked the second consequent month of year over year increases. The October number of sales were down 14.1% below the average October dating back to DataQuick’s figures beginning in 1988. Investors accounted for 23.6% of all sales, the lowest rate since 2010. Short Sales accounted for 6.1% of sales, just above the 6.0% last month and down from 10.3% last October. The Southern California region saw monthly home sales drop 0.4% from September and 4.4% from last October to a 3 year low. The Southern California region showed the number sales in October 17.7% below the average October dating back to 1988. Most of the reduction in sales was accounted for in areas at or below the median price level like Riverside and San Bernardino County not Los Angeles.  Unlike The California Association Of Realtors figures which are based on Realtor member’s reported sales , DataQuick uses recorded sales from county recorders. 

​Prices – DataQuick reported that the California Median price paid for a home was $382,000, down 1.8%  from $389,000 September, yet up 7% from October 2013 when the median price was $357,000. This was the 32ndconsecutive month of year over year increases. The Southern California median price dropped 0.7% from September’s median price to $410,000. That was up 6.8% from October 2013. The median price is the point in which half the homes sell for more, half the homes sell for less. It is a good economic indicator, but does not represented of any particular home or area.


Economic update for the week ending November 8, 2015

Mortgage Rates – Freddy Mac reported that the 30 year fixed mortgage rate average for the week was up slightly from 3.98% last week to 4.02% this week. The 15 year fixed was also up to 3.21% from 3.13 % last week.

​ Freddie Mac and Fannie Mae Profits – Mortgage giants Fannie and Freddy announced that they would be paying a 3rd quarter profit dividend to the US Treasury of $6.8 billion. This brings the total paid to $225.5 billion since the US take over in 2008, which resulted in $188 billion in aid to keep the companies afloat. In the 2012 election there was much talk about how to sell off Fannie and Freddie or get the Treasury out of the mortgage business. This was when the treasury was close to breaking even. Now that they have made a huge profit, expect this to be a topic of conversation, as former stockholders are suing the government feeling they got taken advantage of. Housing Affordability Holds Steady – The California Association of Realtors reported yesterday that lower rates and more moderate home price gains helped keep affordability in check in the 3rd quarter. Home buyers needed a minimum annual combined income of $94,960 to qualify for a purchase of the statewide median priced single family home of $467,700. This was up only slightly from the $93,560 needed for the $457,140 median priced single family home in the 2nd quarter.

Economic update for the week ending October 31, 2015


 October turned out to be a fantastic month! We kicked off the month on a somewhat rocky start as Ebola fears struck our country and rattled the markets.  As the month progressed, we had positive jobs news asinitial jobless claims have fallen to pre-recession levels and the 248,000 gain in payrolls followed an 180,000 increase in August that was bigger than previously estimated. The pickup in hiring this month also showed employers are gaining confidence. Retail Sales reported higher than expected. Corporate profits for the third quarter also came in above expectations. All in all it was a great month! 

Home prices, especially in coastal California markets, have returned to levels that are unaffordable for most households, and a slowdown in prices, coupled with stronger job and income growth, could give more would-be buyers time to catch up. Still, prices here remain 18% below their peak in 2006, leaving some homeowners holding little or no equity in their homes.The slowdown in price growth is beginning to have an impact on the market. The number of homes sold in the six-county Southland grew in September for the first time in a year.Average 30-year mortgage rate just shy of 4%. The 30-Year Fixed Mortgage Rate is at 3.98% compared to 3.92% last week and 4.19% last year. Since April, the 30-year fixed rate has plummeted nearly 50 basis points. The average fee for a 30-year mortgage was unchanged from last week at 0.5 point. The fee for a 15-year mortgage also remained at 0.5 point. The 15-year fixed-rate average ticked up slightly to 3.13%. It was 3.08% a week ago and 3.24 percent a year ago. The 15-year fixed rate has declined almost 40 basis points the past six months. Hybrid adjustable rate mortgages were up as well. The five-year ARM average2.94% up from last week at 2.91%. The fee was steady at 0.5 point. For a one-year ARM, the average rate edged up to 2.43% from to 2.41% last week. The fee held at 0.4 point. Applications for "re-fi's" jumped 23% in the week ended Oct. 17 — reaching their highest level since November 2013, according to the Mortgage Bankers Association. But refinance applications fell 7% in the latest week, ended Oct. 24.

  Mortgage giant Freddy Mac's weekly Mortgage rate survey showed slightly lower rates. The 30 Year Fixed Mortgage Rate was at 3.92% compared to 3.97% last week and 4.19% last year. Since April, the 30-year fixed rate has plummeted nearly 50 basis points. The 15-year fixed-rate average dropped to 3.1%. It was 3.18% a week ago and 3.24 percent a year ago. The 15-year fixed rate has declined almost 40 basis points the past six months. Hybrid adjustable rate mortgages were mixed. The five-year ARM average edged down to 2.91%.  It was 2.92% a week ago and 3% a year ago. The one-year ARM average rose to 2.41%. It was 2.38% a week ago. The 30 year loan rate rose a little today and yesterday. The 30 year fixed is just over 4% and the 15 year fixed if around 3.25%.  Both rates are at near their lowest levels of 2014 and are just slightly above early in the week which was the best in 72 weeks.Freddie Mac October U.S. Economic and Housing Market Outlook. Freddie Mac released this week its U.S. Economic and Housing Market Outlook for October, showing the four key ingredients labor, income, fixed investment and trust required to lift the economy toward robust sustainable growth are still lacking the necessary thrust. As interest rates have dipped lower, demand for home loans has surged. Mortgage applications jumped nearly 12% in the week ended Oct. 17 compared with a week prior, according to the Mortgage Bankers Association, a lenders trade group. The increase is driven by homeowners seeking to refinance existing mortgages. Refinancing applications shot up 23% in the week through Oct. 17—the largest weekly leap since January 2012after a 5.6 percent advance the week before —though they remain 44% lower than in June 2013 while the purchase applications measure dropped 4.6 percent. The refinancing gauge jumped 23.3 percent. For borrowers hoping to pull the trigger on a refinance, this spate of the lowest mortgage rates since June 2013 is a pretty good opportunity. Homeowners now have more equity as well due to rising prices. Many who could not refinance in the last few years are able now that they can meet the equity requirements.

Friday we say the 30-year fixed-rate mortgage breach the psychologically-important rate of 4%, falling to 3.96%, down 12 basis points from a week earlier.

The average rate for the 15-year fixed-rate mortgage fell to 3.30% in the latest week from 3.36% in the prior week. Bond yields around the world fell on Thursday , with the US 10-year Treasury bond falling to 2.28%, its lowest level since June 2013. Meanwhile, the rate for a 5-year Treasury-indexed hybrid adjustable-rate mortgage also declined to 3.05% from 3.06%. The rate for a 1-year Treasury-indexed ARM remained at 2.42%.

The benchmark US 10 year Treasury Bond yields dropped this week closing Friday at 2.31% .  It was 2.45% last Friday.  Home mortgage rates follow bond yields.

Economic update for the week ending October 5 , 2015

Hiring Surge Pushes U.S. Jobless Rate to Six-Year Low. We kicked off October with great jobs news, initial jobless claims that have fallen to pre-recession levels.  The September Job report was released today, a powerful surge in hiring pushed unemployment to a six-year low of 5.9 percent in September as the U.S. labor market showed renewed vigor. The unemployment rate fell to 5.9% from 6.1%, lowest since July 2008, the Labor Department said Friday.

The 248,000 gain in payrolls followed an 180,000 increase in August that was bigger than previously estimated, the Labor Department reported in Washington. Revisions boosted the job count by 69,000 over the previous two months. The jobless rate fell from 6.1 percent to the lowest level since July 2008. Private employers added 213,000 jobs in September, payroll processor ADP released. Economists had estimated that ADP would report 207,000 private-sector job additions. They predicted the Labor Department’s report Friday would show 215,000 payroll gains by businesses and governments, this month’s numbers surpassed predictions for the second month in a row. Trade, transportation and utilities led the job gains, with 38,000. Manufacturers added 35,000, and professional and business services, 29,000.

The pickup in hiring shows employers are gaining confidence the expansion in the world’s biggest economy will be sustained, surviving slowdowns in Europe and Asia that have hurt global stock markets. Stagnant wage growth kept the report from being universally upbeat, giving Federal Reserve policy maker’s reason to be patient in removing monetary stimulus.

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