Economic Update for the Week Ending December 25, 2021

Beverly Hills

Stock markets rise in holiday shortened week – News of the new Omicron COVID-19 strain becoming the dominant strain in the U. S., yet causing less severe disease than previous variants, as well as approval of a second anti-viral to treat COVID-19 calmed fears of another shut-down.All stock indexes had dropped sharply after Omicron was first announced just three weeks ago recovered much of their loses last week.  

  • The Dow Jones Industrial Average closed the week at 35,950.56, up 1.7% from 35,365.44 last week. It is up 17.5% year-to-date. 
  • The S&P 500 closed the week at 4,725.79, up 2.3% from 4,620.64 last week. It is up 25.8% year-to-date. 
  • The NASDAQ closed the week at 15,653.37, up 3.2% from 15,169.96 last week. It is up 21.5% year-to-date.

U.S. Treasury bond yields - The 10-year treasury bond closed the week yielding 1.50%, up from 1.41% last week. The 30-year treasury bond yield ended the week at 1.91%, up from 1.82% last week. We watch bond yields because mortgage rates often follow treasury bond yields. 

Mortgage rates - The December 23, 2021, Freddie Mac Primary Mortgage Survey reported mortgage rates for the most popular loan products as follows: 

  • The 30-year fixed mortgage rate was 3.05%, down from 3.12% last week. 
  • The 15-year fixed was 2.30% down from 2.34% last week. 
  • The 5-year ARM was 2.37%, down from 2.45% last week. 

U.S. Existing-home sales jump again in November – The National Association of Realtors reported that existing-home sales increased 1.9% in November from the number of sales in October. That marked three consecutive months in month-over-month increases in sales at a time of year when the number of sales would usually decrease. Year-over-year sales were down 2% from one year ago. The median price paid for a home in the United States was $353,900, up 13.3% from $310,800 last November. There has been 117 straight months of year-over-year increases in home prices, the longest-running streak on record. The number of homes for sale was 13.9% below the number of homes for sale in November of 2020. There was a 2.1-month supply of homes available for sale, down from a 2.5 month supply last November. First-time buyers accounted for 26% of all sales. Investors and second-home buyers accounted for 15% of the sales. 24% of the sales were all-cash purchases. Foreclosures and short sales accounted for less than 1% of the sales. Existing-home sales include single-family, condominiums, townhouses, and co-ops.

 Happy Holidays and a Merry Christmas day to all!

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