Market Update | Local Tips, Trends, Rants & Events | Chelsea Robinson | Encino and Sherman Oaks Real Estate Agent and Houses for SaleThis week’s Market Update is quite interesting! California Association of Realtors says that 30% – 40% of all households could afford to purchase a median priced home. What do you think of those stats? Where do you think you fall in these numbers? Read on for more info in this week’s Market Update!

Stock market indexes reach new record highs – The Dow and S&P closed at record highs on Friday. They both gained about 1% for the week.  Stocks rallied on Thursday and Friday following an announcement that a tax reduction plan would be announced in the next few weeks, and an outline of a plan drafted by the chairman of the House Committee of Financial Services which would remove many regulations in The Dodd Frank Financial Reform Bill passed in 2010. Investors are becoming more optimistic that lower taxes, less regulation, and higher infrastructure spending could fuel faster economic growth. 2016 fourth quarter corporate profits beat estimates by most companies reporting, which provided further optimism.  Energy stocks were boosted as well because investors were encouraged to see that OPEC is following through on its commitment to decrease production of oil to increase oil prices.  The  Dow Jones Industrial Average closed the week at 20,296.37, up from last week’s close of 20,071.46. The S&P 500 ended the week at 2,316.10, up from its close of 2,297.42 last week.  The NASDAQ closed the week at 5,734.13, up from last week’s close of 5,666.77.

U.S. Treasury Bond yields  lower this week  – The 10-year U.S. Treasury Bond closed the week yielding 2.41%, down from 2.49% last Friday. The 30-year Treasury Bond yield closed the week at 3.01%, down from 3.11% last weekMortgage rates follow bond yields, so we watch treasury  bonds closely.

Mortgage rates hold steady  – The Freddie Mac Primary Mortgage Survey released on February 9, 2017 revealed that average mortgage rates from lenders surveyed for the most popular mortgage products were as follows: The 30-year fixed rate average was 4.17%. The 15-year fixed average rate was 3.39%.  The 5/1 ARM average rate was 3.21%.

Home sales and prices spike in the fourth quarter of 2016 – The number of homes sold in the fourth quarter of 2016 was 7.1% higher than the fourth quarter of 2015 according to The National Association of Realtors.  It was the highest quarterly sales pace of the year and pushed available housing supply to record lows in the final quarter of 2016.  Home prices increased at a quicker pace in the final quarter of 2016, up 5.7% from the same quarter one year earlier which was attributed to more competition for fewer homes. The number of homes for sale nationally in the fourth quarter was down 6.3% from the number of homes for sale in the same quarter of 2015.It marked the fewest number of homes for sale since NAR began tracking available listings. Nationally there was a3.9 month supply of homes for sale in the fourth quarter of 2016, down from a 4.6 month supply in the same quarter a year ago. California had a 2.6 month supply in December, according to The California Association of Realtors.
California fourth quarter housing affordability unchanged from 3rd quarter – The California Association of Realtors reported that 31% of California households could afford to purchase a median price home in the fourth quarter, unchanged from the third quarter and up from 30% in the fourth quarter of 2015. A minimum income of 100,800 was needed to purchase median priced home of $511,360 according to CAR.  40% of households were able to purchase a condominium or town home, which had a median price of $413,700 and needed an annual income of $81,550. They attributed the slight year over year increase in affordability to increases incomes.

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.

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