With the beginning of July it’s time to look back on June’s mixed stock markets, while treasury Bond yields and mortgage rates ended the month lower.
On the other hand, compared to April, existing home sales increased again in May and with 138,000 new jobs in May we are on a good level so far, since the unemployment rate dropped to a 16 year low as the Bureau of Labor Statistics reported.
Below you can see the Market Update for the last week of June as well.
Stock markets mixed in June – Key economic developments in June included a 3rd interest rate hike by The Federal Reserve in 6 months which didn’t seem to move stocks. Oil prices dropped, but recovered much of the losses in the last few days of the month which hampered energy stocks. Oil has dropped 13.9% year to date. All banks passed their stress tests which helped financial stocks. Tech stocks which have had a great run sold off in June as investors took profits. Still up 14.1% year to date the tech heavy NASDAQ was the only index that closed down in June. The Dow Jones Industrial Average ended the month at 21,349.63, up from its May 30, 2017 close of 21,008.65. The Dow is up 8% year to date. The S&P 500 closed the month at 2,423.41, up from its May close of 2,411.80. The S&P has risen 8.2% year to date. The NASDAQ closed the month at 6,140.42, down from last month’s close of 6,198.52. It’s up 14.1% year to date.
Treasury Bond yields end month lower – The 10-year Treasury bond closed on June 30, 2017 at 2.31%, up from 2.21% at the end of May The 30-year treasury yield ended the month at 2.84%, down from 2.87% last month.
Mortgage Rates lower in June – Although rates dropped in June they rose in the last few days of the month to end the month about where they started. The June 29, 2017 Freddie Mac Primary Mortgage Survey reported that the 30 year fixed mortgage rate average was 3.88%, down from 3.94% on June 1, 2017 The 15 year fixed was 3.18%, unchanged from last month’s close of 3.19% The 5-year ARM was 3.17%, up slightly from 3.11% on June 1.
California existing home sales numbers and prices accelerate in May – After a disappointing April, existing home sales bounced back in May. On a seasonally adjusted annualized rate single family existing home sales totaled 430,460 in May. That was a 5.4% increase from April and a 2.6% increase from last May. The statewide median price paid for a home was $550,200, up 2.3% from April and up 5.8% from May 2016.
At a regional level the Los Angeles metro region had a 6.9% increase in sales. Existing home sales include all detached and attached homes which include single family, town-homes, condominiums, and co-ops.
C.A.R.’s Unsold Inventory Index fell from 3.3 months in April to 2.9 months in May. The index measures the number of months needed to sell the supply of homes on the market. The index stood at 3.4 months in May 2016.
Nationwide home sales and prices higher in May – The National Association of Realtors reported that existing home sales increased
2.7% year over year in May from May 2016. Month over month sales were up 1.1% from April. The median price paid for a home in The U.S. was 5.8% higher in May than May 2016. This marked the 63rd straight month of year over year price increases.
There was a 4.2 month supply of homes for sale in May, down from 4.7 month supply in April. Existing home sales include detached homes, condominiums, town-homes, and co-ops. Pending sales, homes that went under contract in May, were down 0.8% from April.
U.S. employers add 138,000 new jobs in May – Unemployment rate drops to 16 year low – The Bureau of Labor Statistics reported that the economy added 138,000 new jobs in May. Economists had expected job gains of 185,000. Over the past three months the economy has averaged just 121,000 net new jobs a month. This is well below monthly averages of over 200,000 last year. Economists are mixed on whether after 80 straight months of job growth and the economy nearing full employment that there are just not enough people looking for jobs, or if the strength of the labor market is stalling. Fed chairwoman, Janet Yellen, has said the economy needs to add about 100,000 net new jobs monthly just to keep up with population growth. Theunemployment rate dropped to 4.3%, its lowest level since 2001. Wages rose just 2.5% over the past 12 months ending May 31. Usually as unemployment dips wages rise. Stagnant wages have experts puzzled.
California jobless rate lowest since 2000 – The Employment Development Departmentreported that the unemployment rate in California has dropped to 4.7% in May. Los Angeles Countyfared even better. The unemployment rate in the county fell to 4.4%.
Economic update for the week ending June 30, 2017
For the week ending June 31, 2017 – The Dow Jones Industrial Average ended the week at 21,349.63, down slightly from 21,394.76 last week. The S&P 500 closed the week at 2,423.41, down from its close last week of 2,438.30. The NASDAQ closed the week at 6,140.42, down from last week’s close of 6,265.25.
Bond yields up in last week of month – The 10-year Treasury bond closed the week at 2.31%, up from 2.15% last week. The 30-year treasury yield ended the week at 2.84%, up from 2.71% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.
Mortgage Rates almost unchanged this week– The June 29, 2017 Freddie Mac Primary Mortgage Survey reported that the 30 year fixed mortgage rate average was 3.88%, almost unchanged from 3.90% last week. The 15 year fixed was 3.18%, almost unchanged from 3.17% last week. The 5-year ARM was 3.18%, also unchanged from 3.14% last week. Unfortunately, rates rose late in the week so next weeks rates will be higher.
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.