Happy Thanksgiving everyone! I hope you all enjoyed your holiday – and the beginning of Hannukah if you celebrate. Perhaps it was because it was both the end of the week and the end of the month, but Syd Leibovitch was kind enough to still deliver his weekly market update, despite the holiday.
Stocks continue to be strong as we head into the heart of the holiday season. The market closed early this Friday in a short post-holiday session. The Dow closed out the month by still holding on to its 16,000 benchmark, finishing up at 16,086.41, marking a 0.15% gain over last week’s 16,064.77 close and a gain of 3.48% from October’s 15,545.57 close. The Dow is up 23.5% from November 2012’s 13,025.58 close. The Nasdaq was up over 4,000 this week, hitting numbers that haven’t been seen in 13 years. It closed at 4059.89, up 1.71% over last week’s 3,991.65 close. It was up 3.58% from October’s 3,919.71 close and up 34.87% from November 2012’s 3,010.24 finish. The S&P 500 finished November at 1,805.81 up 0.06% from last week’s 1.804.76 close. It was up 2.81% from October’s 1756.54 close and up 27.51% from November 2012’s close of 1,416.18.
The 10-year Treasury note yield rate ended the month at 2.75%, the same as last week’s close. It ended October at 2.57%. It was 1.62% at the end of October 2013.
This week there was a slight rise in interest rates as reported by the Freddie Mac Weekly Primary Mortgage Market Survey, the 30-year-fixed rate was up this week to 4.29% from 4.22%. It ended October at 4.10%. The 15-year-fixed rose to 3.30% from last week’s 3.27%. It ended October at 3.20%. A year ago the 30-year fixed was at 3.32% and the 15-year was at 2.64%. Jumbo loans and high ballance conforming are about .375% higher.
The California Association of Realtors (C.A.R.) released their monthly pending homes and distressed housing report this week showing that California pending home sales reversed a two-month decline to post higher in October, but were down from a year earlier. The Pending Home Sales Index rose 2.5% in October to 109.3, up from 106.7 in September, based on signed contracts. This was much higher than the average September-to-October change of 0.7% over the past five years. Pending sales were down– 9.9% from the 121.2 index recorded in October 2012.
The share of equity sales – or non-distressed property sales – dipped slightly in October (to 85.5% from 85.7%) but is still more than eight in 10 sales, marking the fourth straight month that equity sales have been more than 80 percent of total sales. Equity sales made up 63.2% of sales in October 2012. In Los Angeles County the percentage of distressed sales in October 2013 was 15% up from September’s 14% but far below October 2012’s 37%.
On a national level, the National Association of Realtors released their Pending Home Sales Index for October which was down –0.6% to 102.1 in October from an upwardly revised 102.7 in September. This number is down -1.6% from October 2012 when it was 103.8. The NAR’s chief economist, Lawrence Yun, said the weaker activity was expected and reflected impact from the government shutdown. He also stated that new mortgage rules going into effect next year could delay the approval process and that any future government shutdowns could also harm both the economy and the housing market.
The S&P/Case Shiller composite index for September showed that the 20 metropolitan areas on the list gained 0.7% in September in line with the a forecast from Reuters. Prices were up 13.3% year over year which represents the strongest gain since February 2006, beating the expectation of 13%. The rise was lower than the 1.3% gain seen from July to August this year. In Los Angeles the index rose 1.1% down from the 2.0% gain seen from July to August this year but up 21.8% over last year’s numbers.
A report from the Commerce department said that permits for future U.S. home construction rose to their highest level in over 5 years in October. Permits rose 6.2% to a seasonally adjusted annual rate of 1.03 million units. That was the highest rate since June 2008. Permits increased 5.2% in September. August’s permits were revised to a 926,000-unit pace from the previously reported 918,000 units. Permits generally lead housing starts by at least a month. The Commerce Department has postponed the release of housing starts and completions for September and October until Dec. 18 because the collection of data was affected by the government shutdown.
The Conference Board announced that the consumer confidence index went down to a seven-month low in November, falling to 70.4 from a revised 72.4 a month earlier (the reading had previously been reported at 71.2). Economists had been predicting a November reading of 72.6. The amount of Americans who said jobs would become more plentiful in the next six months went down to 12.7%, the lowest number since November 2011. The shares of those who said they expected a pickup in their incomes fell to an eight-month low of 14.9% in November from 15.7% a month earlier.
It was also announced this week that the maximum size of U.S. home loans that Fannie Mae and Freddie Mac will hold steady for 2014. The maximum is $417,000 in most areas but capped at $625,000 in more expensive areas like Los Angeles and New York. In announcing the decision the FHFA said that the housing market was not showing enough strength to warrant lowering the limits right now.
I hope you are having a nice holiday weekend!
If you’d like more information on the San Fernando Valley or Los Angeles, or to have help looking for your next home, please feel free to reach out! I’m happy to help, no obligation.