Economic update for the week ending July 21, 2018
Stocks end week with mixed results - Strong second quarter earnings were hampered by trade and tariff fears. Stock market indexes were slightly changed from last week. The Dow Jones Industrial Average closed the week at 25,058.12, up from 25,019.42 last week. It is up 1.4% year to date. The S&P 500 closed the week at 2,801.31, unchanged from 2,801.83 last week. It’s up 4.8% year to date. The NASDAQ closed the week at 7,820.20, down slightly form 7,825.82 last week. It’s up 13.3% year to date.
Treasury Bond Yields higher this week - The 10-year treasury bond closed the week yielding 2.89%, up from 2.83% last week. The 30-year treasury bond yield ended the week at 3.03%, up from 2.93% last week. We watch bond rates because mortgage rates follow bond rates.
Mortgage rates almost unchanged - The July 19, 2018 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 4.52%, unchanged
from 4.53% last week. The 15-year fixed was 4.00% almost unchanged from 4.02% last week. The 5-year ARM was 3.87%, unchanged
from 3.86% last week.
California Unemployment rate remains at all time low in June - The Employment Development Department reported that just 800 new jobs were created in June. The unemployment rate held steady at 4.2%. Average hourly wages were $30.42 in June. That was just 2.6% above last June’s rate. Los Angeles County had much better results, 8,800 new jobs were created in June. Average hourly wages grew 4.8% in Los Angeles and Orange Counties.
The California Association of Realtors has not released June sales figures. I’d expect them any day. Housing sale prices and numbers will be included in next week’s update. I would not be surprised to see inventory levels begin to creep up from historic low levels based on what we are seeing. We are seeing a number of homes that are being reduced in order to sell.