Economic Update: Insights for the Week Ending November 23, 2024

Dear Friends & Colleagues,

As we close out another week, markets and housing data continue to reflect a dynamic economic environment. Here's a detailed look at the key financial and housing metrics shaping the economy:

Stock Market Performance

The stock market saw robust gains this week, with all major indices rising:

• Dow Jones Industrial Average: Closed at 44,296.51, up 2% from the previous week, reflecting a 17.5% gain year-to-date.
• S&P 500: Reached 5,969.34, increasing 1.7% for the week and 25.2% year-to-date.
• Nasdaq: Ended at 19,003.65, also up 1.7% this week and showing an impressive 26.6% gain year-to-date.

These gains underscore continued optimism in equities, driven by positive earnings reports and market confidence in a resilient economy.

Treasury Bond Yields

U.S. Treasury bond yields remained steady:

• 10-year Treasury bond: Yielded 4.41%, slightly down from last week's 4.43%.
• 30-year Treasury bond: Held steady at 4.60%.

Bond yields are a critical indicator to watch, as mortgage rates tend to follow their trajectory.

Mortgage Rates

Freddie Mac's latest Primary Mortgage Market Survey revealed slight increases in mortgage rates:

• 30-year fixed-rate mortgage: Averaged 6.84%, up from 6.78% last week.
• 15-year fixed-rate mortgage: Rose to 6.02%, compared to 5.99% the week before.

These modest increases reflect market adjustments, with rates remaining high compared to historical averages.

U.S. Housing Market Update

The National Association of Realtors reported encouraging trends in October's existing-home sales:

• Sales: Annualized rate of 3.96 million units, up 2.9% year-over-year, marking the first annual increase in three years.
• Median home price: Reached $407,200, a 4% rise from $391,600 in October 2023.
• Inventory: Supply increased to 4.2 months, compared to 3.6 months last year.

Buyer Profile:

• First-time buyers: Accounted for 27% of sales.
• Investors and second-home buyers: Made up 17%.
• Cash buyers: Represented 27%.

These figures indicate improved buyer activity, particularly among investors and first-time buyers, despite high mortgage rates.

California Housing Market Highlights

California's housing market outperformed the national average with notable growth:

• Sales: Annualized rate of 264,870 homes, a 4.7% increase from September and a 5.8% rise from October 2023.
• Median home price: Climbed to $888,740, up 2.4% from September and 5.8% year-over-year.
• Inventory: A 3.1-month supply, down from 3.6 months in September but up from 2.7 months in October 2023.

This rebound highlights the demand for California's limited housing inventory, driving up both sales and prices.

Key Takeaways

• Economic Strength: Strong stock market performance and growing home sales indicate resilience in the broader economy.
• Rising Mortgage Rates: These may dampen affordability, but steady inventory growth and demand, especially in California, are mitigating their impact.
• Investor Confidence: An increase in investor activity and cash purchases suggests optimism in the real estate sector's long-term potential.

Stay tuned for more updates, and enjoy your weekend!

Kind regards,

Tina Marie Lucarelli - Global Real Estate Advisor

Engel & Volkers Westlake Village

DRE 02102354