Market & Economic Update | Week Ending May 3, 2024

Economic Insights: May began with a backdrop of falling stocks and rising interest rates, driven by increasing inflation since the year’s start. Federal Reserve Chairman Jerome Powell eased concerns about rate hikes midweek, stating the Fed’s intention to maintain current rates and halt aggressive balance sheet reductions. Friday’s job report showed slowing growth, moderated wage increases, and a slight uptick in unemployment, pivotal factors for the Fed’s rate decisions.

Key Market Metrics:

• Stock Markets: Major indices closed the week with gains, building on previous momentum. The Dow Jones Industrial Average rose 1.1%, the S&P 500 climbed 0.5%, and the Nasdaq increased by 1.4%.
• U.S. Treasury Bond Yields: Yields retreated slightly, with the 10-year Treasury bond at 4.50% and the 30-year Treasury bond at 4.66%, impacting mortgage rates.
• Mortgage Rates: Freddie Mac reported rates for popular loan products, with the 30-year fixed rate at 7.22% and the 15-year fixed rate at 6.47%, noting a potential decline in the upcoming week.

Stock Market Update: Monday saw stock advances, fueled by increased expectations of Federal Reserve rate cuts. Positive sentiment followed Powell’s reassurance regarding rate hikes. Micron shares surged after an upgrade, while investors monitored upcoming earnings reports and key speakers from the Federal Reserve.

Real Estate Market Update – Southern California: Southern California’s real estate market continues to experience robust activity, albeit with some shifts in dynamics due to changing interest rates. With mortgage rates hovering at multi-year highs, buyers are adjusting their purchasing power and timelines. While some prospective buyers may be deterred by higher rates, others are motivated by fears of further increases, leading to sustained demand in certain segments.

In April, pending sales and new listings remained steady, indicating ongoing interest from buyers and sellers alike. However, market observers anticipate a potential adjustment in pricing dynamics as affordability concerns persist. Median sale prices are expected to reflect a balance between seller expectations and buyer affordability, potentially moderating the rapid price appreciation seen in recent months.

Despite these factors, Southern California’s real estate market retains its appeal, driven by factors such as desirable climate, lifestyle amenities, and economic opportunities. As the region navigates evolving market conditions, buyers and sellers are advised to stay informed and work closely with experienced real estate professionals to navigate the complexities of the market.

As the economic landscape continues to evolve, stay tuned for updates on market trends and developments impacting Southern California’s real estate sector.

Disclaimer: The information provided does not constitute financial advice. Always conduct thorough research and consult with a real estate professional before making property-related decisions.