Stock markets ended the week lower – Stock markets ended a multi-week winning. The Nasdaq had closed higher for nine straight weeks. The Bank of England raised rates by 1/2% which surprised economists. U.S. Federal Reserve Chairman Powell testified in Congress this week. He stated that further rate hikes would be necessary. These moves ignited recession fears. Investors also took profits and sold stocks that had rebounded, some to new highs, and may have been perceived as overbought. The Dow Jones Industrial Average closed the week at 33,727.43, down 1.7% from 34,299.12 last week. It is up 1.7% year-to-date. The S&P 500 closed the week at 4,348.33, down 1.4% from 4,409.59 last week. It is up 13.3% year-to-date. The Nasdaq closed the week at 13,492.52, down 1.4% from 13,689.57 last week. It is up 28.9% year-to-date.
U.S. Treasury bond yields: The 10-year treasury bond closed the week yielding 3.74%, down slightly from 3.77% last week. The 30-year treasury bond yield ended the week at 3.82%, down from 3.86% last week. We watch bond yields because mortgage rates follow bond yields.
Mortgage rates – The Freddie Mac Primary Mortgage Survey reported that mortgage rates for the most popular loan products as of June 22, 2023, were as follows: The 30-year fixed mortgage rate was 6.67%, down slightly from 6.69% last week. The 15-year fixed was 6.03%, down from 6.10% last week.
U.S. existing-home sales: The National Association of Realtors reported that existing-home sales totaled 4.30 million units on a seasonally adjusted annualized rate in May, down 20.4% from an annualized rate of 5.40 million in May 2022. The median price for a home in the U.S. in May was $396,100, down 3.1% from $408,600 one year ago. There was a 3-month supply of homes for sale in May, up from a 2.6-month pool last May. First-time buyers accounted for 28% of all sales. Investors and second-home purchases accounted for 15% of all sales. All-cash purchases accounted for 25% of all sales. Foreclosure and short sales accounted for 2% of all sales.
California existing-home sales: The California Association of Realtors reported that existing-home sales totaled 289,460 on a seasonally adjusted annualized basis in May, down 23.6% from the 378,640 homes that closed escrow on an annualized basis last May. Year-to-date, the number of homes sold was down 35.1% at the end of May from the same period. The statewide median price for a home in May was $836,110, up 3% from April but down 6.4% from $893,200 one year ago. There was a 2.1-month supply of homes for sale in May, unchanged from a 2.1-month pool one year ago.
The graph below shows sales data by county in Southern California.
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