Today the November jobs report was released. It showed 203, 000 non farm jobs added. This number was well over expectations. The stock market posted large gains and, unfortunately, interest rates rose. The unemployment rate droped from 7.3% to 7%. The lowest rate in over 5 years!
This week showed more indications that the economy is strengthening. The Bureau of Economic Analysis released data showing that the third quarter GDP growth is at 3.6%, far above the preliminary estimate of 2.8% and above the second quarter’s 2.5%.
After mild losses earlier in the week, stocks rebounded on the positive jobs numbers. The Dow closed out back up over 16,000 closing the week at 16,020.20, down 0.41% from last week’s 16,086.41 close. The Nasdaq was once again up over 4,000 this week, closing at 4,062.52 up 0.06%from last week’s 4059.89 close. The S&P 500 finished the week at 1,805.09 down just -0.04% from last week’s 1,805.81 close.
Positive economic indicators led to a boost in mortgage rates. Interest rates rose this week as reported by the Freddie Mac Weekly Primary Mortgage Market Survey, the 30-year-fixed rate was up this week to 4.46% from 4.29%. The 15-year-fixed rose to 3.47% from last week’s 3.30%. A year ago the 30-year fixed was at 3.34% and the 15-year was at 2.67%. After the jobs report today rates rose further. The 30 year fixed conforming is closer to 4.625% and jumbo and high balance conforming are close to 5%.
The 10-year Treasury note yield rate finished the week at 2.88%, up from last week’s 2.75% close. It was 1.59% a year ago.
CoreLogic data for October showed that prices increased 0.2% in October from September and are up 12.5%from a year ago. One of the biggest gains was in California which saw a 22.4% increase statewide and a 22.1% increase in Los Angeles.
The Labor Department reported that construction spending increased by 0.8% in October but home construction fell 0.6% in October from September. According to an AP report, permits issued for apartments increased in October at their fastest pace in more than five years while single-family home construction permits rose only slightly and were at the same pace as in May.
The Census Bureau released data showing that new sales of single-family homes rose 24.5% month over month in October and were up 21.6%year over year. However sales for June, July, and August were all revised downward and September was down 6.6% from August’s downwardly revised level. The Census Bureau estimates that there is a 4.9 month supply of homes at the current sales rate, down from the 6.4 month supply calculated in September. This data demonstrates the dramatic upseing we have seen the last couple of months. Usually real estate sales slow this time of year. That, for what ever reason, has not been the case in October and November!
Realty Trac reported that foreclosure activity dropped -23% from October 2012 to October 2013. We are not seeing many foreclosed homes for sale in our markets. What a difference just a couple of years makes!
I hope you have a great weekend. Lets all think about developing a great business plan for 2014. It looks like its going to be a banner year!
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.