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Stock markets close week at or near record highs

New York Stock Exchange inside from above

The DOW and S&P hit new highs this week. Stocks finished higher for the third straight week. Investors were optimistic on hopes of lower interest rates as the Federal Reserve signaled that a rate cut this year was being considered. Other central banks overseas have also either dropped rates or signaled that they were considering easing, forcing global bond yields down. 

The Dow Jones Industrial Average closed the week at 26,719.13, up 2.4% from 26,089.61 last week. It’s up 14.5% year-to-date. 

The S&P 500 closed the week at 2,950.46, up 2.2%  from 2,881.98 last week. It is up 17.1% year-to-date. 

The NASDAQ closed the week at 8,031.71, up 3% from 7,796.66 last week. The NASDAQ is up 21% year-to-date. 

Treasury Bond Yields hold at 24-month low

The 10-year treasury bond closed the week yielding 2.07%, almost unchanged from 2.09% last week. The 30-year treasury bond yield ended the week at 2.59%, unchanged from 2.59% last week. We watch treasury bond yields because mortgage rates follow bond yields. 

Lower mortgage rates spur more California home sales and higher home prices in May

Mortgage rates have remained at the lowest levels in two years. The June 13, 2019, Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.84%, almost unchanged from 3.82%  last week. The 15-year fixed was 3.25%, almost unchanged from 3.26% last week. The 5-year ARM was 3.48%, down slightly from 3.51% last week. 

The California Association of Realtors reported that the number of existing home sales in May totaled 406,960 on a seasonally adjusted annualized basis in May. It was the first time sales were above the 400,000 benchmark in almost a year. The statewide median price increased to $611,190, up 1.7% from last May, and a new record high. The unsold inventory index showed a 3.2-month supply of homes for sale, up from a 3-month supply one year ago. 

U.S. existing home sales rebounded in May 

The National Association of Realtors reported that the number of existing homes sold increased 2.5% month-over-month in May. The nationwide median price increased 4.8% year over year from last May. That marked the 87th straight month of year over increases in the median price. Inventory levels showed a 4.3-month supply of homes for sale, up slightly from a 4.2-month supply one year ago. 

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