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Economic Update for the Week Ending September 18th, 2021

Stock markets were slightly lower this week – Stocks ended the week slightly lower. Investors seem to be taking a pause. They are trying to digest conflicting data. The largest fear is inflation. The latest CPI report showed consumer prices have risen 4% from one year ago, down from June’s CPI increase of 4.4%. Retail sales figures surged unexpectedly in August after declining for the last few months. The Dow Jones Industrial Average closed the week at 34,584.88 down 0.1% from 34,607.72 last week. It is up 13% year-to-date.  The S&P 500 closed the week at 4,432.99, down 0.6% from 4,458.58 last week. It is up 18.2% year-to-date. The NASDAQ closed the week at 15,043.97, down 0.5% from 15,115.49 last week. It is up 16.8% year-to-date.

Stock Market Chart

U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 1.37% up slightly from 1.35% last week. The 30-year treasury bond yield ended the week at 1.91%, down slightly, from 1.94% last week. We watch bond yields because mortgage rates often follow treasury bond yields.

Mortgage rates – The September 16, 2021, Freddie Mac Primary Mortgage Survey reported mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate was 2.86%, down slightly from 2.88% last week. The 15-year fixed was 2.12%, down from 2.18% last week. The 5-year ARM was 2.51%, up from 2.42% last week.

California home prices continue to surge while the number of sales dropped in August – The California Association of Realtors reported that existing home sales totaled 414,860 on a seasonally adjusted annualized rate in August. That marks a 3.3% decline from the number of sales in July, and a drop of  10.9% from the number of sales in August 2020. August existing-home sales were the lowest number of sales in 14 months, but are similar to number of sales that California saw in 2018 and 2019, which was a very healthy real estate market. Year-to-date sales are up 21.3% from the same period last year.  The median price paid for an existing home in August was $827,940, up 2.1% from July’s median price of  $811,170, and up 17.1% from last August when the median price was $706,900 The California Association of Realtors tracks inventory levels based on how many months it would take to sell the active listings in all MLS systems at the current sales level. There was a 1.9 month supply of homes for sale in August, down from a 2.1 month supply of homes for sale last August.

The graph below shows activity by County for Southern California.

Sources:

  1.  Rodeo Realty, Inc.
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