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Economic Update for the Week Ending March 27th, 2021

Stock Market Stats

Stock markets – Stocks rallied this week after Treasury Secretary, Janet Yellen, and Federal Reserve Chairman, Jarome Powell testified in congress. They suggested that inflation fears are not a serious threat. This pushed interest rates down for the first time in several weeks. The U.S. has also seen a dramatic decrease in COVID-19 cases, and a ramping up of vaccinations over the last several weeks. Conversely Europe and much of South America have seen a rise in cases. They are instituting a new round of restrictions that will impact their economies. That could impact corporate sales to those countries. The Dow Jones Industrial Average closed the week at 33,072.88, up 1.4% from 32,697.97 last week. It is up 8.1% year-to-date. The S&P 500 closed the week at 3,974.10, up 1.6% from 3,913.10 last week. It is up 5.8% year-to-date. The NASDAQ closed the week at 13,138.72, down 0.6% from 13,215.54 last week. It is up 2.0% year-to-date.

 U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 1.67%, up from 1.74% last week. The 30-year treasury bond yield ended the week at 2.37%, down from 2.45% last week. We watch bond yields because mortgage rates often follow treasury bond yields. 

 Mortgage rates – The March 25, 2021, Freddie Mac Primary Mortgage Survey reported mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate was 3.17%, up from 3.09% last week. The 15-year fixed was 2.44%, up slightly from 2.40% last week. The 5-year ARM was 2.84%, up  from 2.79% last week. Rates dropped later in the week. Next week’s rates should be lower. 

 U.S. existing-home sales –The National Association of Realtors announced that the number of existing-home sales in February was 6.22 million on a seasonally-adjusted annualized rate. That marked a drop of 6.6% from January’s sales rate, but a 9.1% increase from February 2020, when sales totaled 5.70 million on a seasonally-adjusted annualized basis. One reason is that February has three fewer days (10% fewer days) than January and that the majority of February closings went under contract in December and January which has fewer openings due to the holidays. The median existing-home sales price in February was 15.8% higher than one year ago. That marked 108 straight months of year-over-year increases in the median price. Existing-home sales include all single-family, condominium, townhouse, and co-op sales.

Sources:

  1.  Rodeo Realty, Inc.
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