Stocks stable in quiet holiday shortened week – Trading was quiet this week, and stocks were mixed, yet mostly unchanged. Investors are taking a wait and see approach with all eyes set no next Friday’s November jobs report. It is widely expected that if the job gains are favorable the Federal Reserve will raise interest rates in December. It will mark the first increase since 2006. Many feel that if rates do not increase it will actually hurt stocks by sending a message that the Fed is worried about the economy. Most investors feel, and Fed officials have signaled, that a rate increase would come in December. Should that happen experts expect the strong dollar to strengthen further, and stocks to remain stable or rally higher. The S&P and Nasdaq have recovered and are again approaching all time highs set in 2014. The Dow Jones Industrial Average closed the week at 17,798.49, down from last week’s close of 17,823.81. The S&P 500 closed the week at 2,090.11, unchanged from last Friday’s close of 2,089.17. The NASDAQ closed the week at 5,127.53, up from last week’s close of 5,104.92.
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.
Have a great Weekend,
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