Market Update | Local Tips, Trends, Rants & Events | Chelsea Robinson | Encino and Sherman Oaks Real Estate Agent and Houses for SaleAfter a good stretch in rising stocks, it seems the recent denial of the repeal and replacement of health care has jolted the market a bit. Find out the effects and what’s in store in today’s Market Update.
Stocks lower this week –  Stocks have surged since the election on expectations of lower taxes, less regulation, more defense spending, and higher infrastructure spending.   It was widely felt that a Republican president, congress, and senate would be able to push through legislation to accomplish these objections which investors felt would improve the economy and increase profits. As it began to appear that the repeal and replacement of health care may not have the votes to pass stocks began to fall, as fears set in about whether legislation to lower taxes, reduce regulation, and increase spending could also fail.   Tuesday’s drop was one of the worst days since the election. While stocks dropped bonds rose which drove interest rates lower.  The Dow Jones Industrial Average closed the week at 20,596.72, down from last week’s close of 20,914.62.  The S&P 500 ended the week at 2,343.98, down from its close of 2,378.25 last week.  The NASDAQ closed the week at 5,828.74, down from last week’s close of 5,901.00.

U.S. Treasury Bond yields lower for second week – The 10-year U.S. Treasury Bond closed the week yielding 2.40%, down from 2.50% last Friday. The 30-year Treasury Bond yield closed the week at 3.00%, down from 3.11% last weekMortgage rates follow bond yields, so we watch treasury  bonds closely.

Mortgage rates drop this week  – The Freddie Mac Primary Mortgage Survey released on March 23, 2017 reported that average mortgage rates from lenders surveyed for the most popular mortgage products were as follows: The 30-year fixed rate average was 4.23%, down from 4.30% last week. The 15-year fixed average rate was 3.44%, down from 3.50% last week. The 5/1 ARM average rate was 3.24%, down from 3.28% last week. 

U.S. new home sales surge in February – The Commerce Department reported that new home sales rose 6.1% in February from January’s sales pace levels.  Year over year new home sales increased a staggering 13% from last February, 2016. The National Association of home Builders / Wells Fargo builder sentiment index rose to its highest reading since June 2005. 

Low inventory leads to a decline in sales of pending existing homes – The California Association of Realtors reported that new contracts signed for the purchase of existing homes in February declined 2.6% year over year from the number of contracts last February.  Month over month pending sales increases 3.2% from January’s pending contract level. It’s best to compare year over year rather than month over month due to seasonal reasons.  Pending home sales is an indicator of closed sales.

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