211,000 New jobs created in November – The Labor Department reported that 211,000 net new jobs were created in November. Investors interpreted this robust number as confirmation that the economy is growing at a steady pace. Wages were also up with the average hourly wage up 4 cents to $25.25 after rising 9 cents an hour in October. Year over year hourly wages were up 2.3% in November from November 2014. This is above the inflation rate, and was interpreted as another positive sign. The unemployment rate held steady at 5%, a 7 year low. Experts felt that workers are more confident they would find a job because 273,000 more people entered the workplace bringing the labor participation rate up to 62.5%. Another positive sign, yet still a historically low number.
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.
Home prices reach an all time high in 2015 in 1/3 of the nation – According to Realty Trac’s October 2015 Home Sales Report, released this week, 33 major metro areas, which was 35% of all 94 metro areas analyzed, reached all time highs in 2015. The number of sales in the first 10 months of the year were up 6%, making the number of sales in the first 10 months of 2015 the highest in 9 years. The median sales price for all 94 areas analyzed was up 1% in October and 10% year over year. October marked the 44th consecutive month of year over year median price increases in their data. In individual areas analyzed, 90% showed increases in their year over year median prices in October over last October.
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%.
I hope you are having a good 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.