Stocks have good week with Nasdaq breaking into all time highs– Stocks soared after the Federal Reserve announced that they were not going to raise their benchmark rate this session. They further states that even though we were nearing “full employment” there were some signs of slowing in the economy, and that the economy is growing modestly. If the last sentence makes no sense, welcome to FedSpeak! More failed talks to extend Greece’s debt crises. Greece on the verge of bankruptcy and leaving the Euro. Friday the European Central Bank provided emergency funding to cover a run on Greek Banks. This weighed on stocks. The Dow Jones Industrial Average closed the week at 18,015.95, up from 17,898.84 last week. The Nasdaq closed at 5,117.00, up from 5,051.10 last Friday. The Nasdaq hit highs of 5137 this week, finally surpassing the previous record of 5132 set in 2000 during the .Com bubble. The S&P 500 closed at 2,109.99, up slightly from 2,094.11 last Friday.
Bond yields drop following Fed announcement – After weeks of rising rates it was nice to see a second week of rates settling. While they are still about 1/4% higher than 6 weeks ago they are about 1/4% lower than the highs for the year set just a couple weeks ago. The 10 year U.S. Treasury Bond closed the week at a 2.26% yield, down from 2.39% last week. The 30 year U.S. Treasury Bond closed Friday yielding 3.05%, down from 3.10% last Friday.
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 Realtors reported that statewide home sales of existing single-family homes totaled 423,360 in May on a seasonally adjusted annualized rate. That wasdown 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 homeson 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.
Have a nice weekend!
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