Ready for your weekend (and month end!) update from Rodeo Realty President, Syd Leibovitch?  I know I sure am.
The Labor Department announced that the economy added 288,000 jobs in April and the unemployment level fell to6.3%, the lowest level since September 2008. This was a huge increase that exceeded expectations. The number of jobs added in February and March was also revised upward. However the labor participation rate also went down with a drop of 806,000 fewer Americans in the work force. More unemployed people stopped looking last month than found jobs. That was unexpected, but all in all it’s the best sign we have seen that a more robust recovery is taking hold.

It was also announced that factory orders were  up 1.1% for March after increasing 1.5% in February. Orders for core capital goods were up 3.5% which indicates business investment. Orders for durable goods rose 2.9%.

The markets reacted positively to these reports, with both the Dow and the S&P 500 touching their all-time closing highs before settling back down. After some larger peaks earlier in the week, the Dow closed at 16,512,89 up 0.93% from last week’s close of 16,361,46. The Nasdaq closed at 4,123.90  up 1.19% from last week’s close of 4,075.56. The S&P 500 ended the week at 1,881.41, up 0.95% from last week’s 1,863.40.
The Dow ended April by closing at a record high of 16,580.84, up 0.75% from last month’s close of 16,457,66. TheNasdaq ended April at 4,198.99, down  -2.01% from last month’s close of 4,198.99. The S&P 500 ended the month at1,883.95, up 0.62% from last month’s 1,872.34 close.

The GDP for the first quarter of the year showed that cold weather put the freeze on economic growth. The economy showed a 0.1% GDP growth in January, February and March representing the slowest three-month growth in the economy since the end of 2012.  Growth in the second half of 2013 was at a 3.4% rate. Economists had predicted a 1.2% growth rate. Consumer spending however, grew 3.0% in the first quarter which was in line with 2013’s fourth quarter growth of 3.3%. Economists are viewing this as a temporary setback and expect the economy’s growth rate to return to between 2.5 and 3% in 2014.

This positive view was also substantiated by the Fed which elected to further taper the bond purchase program to $45 billion per month, down from $55 million. The committee plans to bring quantative easing all the way down to zero by the end of the year. This will eventually lead to higher interest rates. I’m surprised that rates have been so stable this year as the Fed has reduced their purchases of Treasury Bonds and Mortgage Securities.

The Freddie Mac Weekly Primary Mortgage Market Survey showed that the 30-year-fixed rate fell slightly to  4.29%, the rate was 4.33% last week. The 15-year-fixed was also down slightly to 3.38% from last week’s 3.39%. A year ago the 30-year fixed was at 3.35% and the 15-year was at 2.56%. Loans over $417,000 are about 4.5% for 30 year fixed and 3.625% for 15 year terms.
The 10 year Treasury bond yield ended the week at 2.60%.  It was 2.68% last Friday and 1.66% a year ago. 

According to the Conference Board, U.S. consumer confidence slipped in April to 82.3 after hitting a six-year high of 83.9 last month. The percentage of consumers who said jobs are plentiful dropped to 12.9% from 13.8% and the amount of those who said jobs are hard to get rose to 32.5% from 31.4%. Those who expect jobs to be more difficult to get over the next six months rose to 15% from 14.1% last month. The expectations index rose to its highest level since August, up to 84.9 from an upwardly revised 84.8 last month.

According to a report from the Census Bureau, the nation’s homeownership rate hit its lowest level in 19 years during the first quarter of this year with 64.8% of homes in the U.S. being owner occupied. Rental vacancy rates remained near record lows coming in at 8.3% while the median rent hit an all-time nationwide high of $766 per month. The homeownership rate has fallen across every age group except for senior citizens. Homeownership in the West is below the national average, coming in at 59.4%.

The Standard & Poor’s/Case-Shiller 20-city home price index rose 12.9% in February compared with 12 months earlier but down from a 13.2% year-over-year gain in January. Home prices fell in 13 of the 20 cities in February compared with the previous month.  Los Angeles registered an 18.2% increase year over year and was up 0.5% from February.

The National Association of Realtors® reported that pending home sales rose in March. The Pending Home Sales Index was up 3.4% to 97.3 from an upwardly revised 94.2 in February. This is -7.9% below the March 2013 index reading of 105.7. In the West along the index increased 5.7% to 91.1 but is -11.1% below March 2013. Existing home sales are expected to total just over 4.9 million this year, a bit below the nearly 5.1 million in 2013. The national median existing home price is expected to grow between 6-7% in 2014.
Have a great weekend!

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