Economic Update | Week Ending December 7, 2024

Dear Friends & Colleagues,

This Week's Economic Highlights

The Labor Department’s November jobs report revealed a surprisingly robust job market. Job gains for September and October were revised upward, and November’s job creation exceeded expectations. Despite these positive developments, bond yields and mortgage rates dropped to their lowest levels in six weeks. The unemployment rate edged up slightly, and wage growth surpassed the Federal Reserve’s target. Federal Reserve officials, including Chairman Powell, emphasized the economy’s resilience while cautioning that interest rate reductions may be slower than initially predicted due to rising inflationary pressures.

Looking ahead, next week will bring the release of the November Consumer Price Index (CPI) and Producer Price Index (PPI), which will shed light on inflation trends. Additionally, the California Association of Realtors (CAR) and the National Association of Realtors (NAR) will publish November home sales data the following week.

Job Growth in November

The Department of Labor and Statistics reported 227,000 new jobs added in November, a substantial recovery from October’s revised 36,000 new jobs, which had been impacted by hurricanes and labor strikes. Economists had predicted 214,000 new jobs, making November’s figures a notable overperformance. The unemployment rate rose slightly to 4.2% from 4.1% in September and October, while average hourly wages maintained a 4% year-over-year increase, matching October’s growth.

Stock Market Update

• Dow Jones Industrial Average: Closed at 44,642.52, down 0.6% from last week’s 44,910.65. Year-to-date, the Dow has risen 18.4%.
• S&P 500: Closed at 6,090.27, up 1% from 6,032.38 last week. The S&P 500 has climbed 27.7% year-to-date.
• Nasdaq: Finished at 19,859.77, a 3.3% gain from last week’s 19,218.17. Year-to-date, the Nasdaq has surged 32.3%.

Treasury Bond Yields

• 10-Year Treasury Bond: Yielded 4.15%, down from 4.18% last week.
• 30-Year Treasury Bond: Yielded 4.34%, slightly lower than last week’s 4.36%.

Treasury bond yields are critical as mortgage rates typically follow their trends.

Mortgage Rate Trends

Freddie Mac’s Primary Mortgage Market Survey, based on data from mortgage lenders, reported the following rates as of November 21, 2024:

• 30-Year Fixed-Rate Mortgage: Averaged 6.69%, down from 6.81% the previous week.
• 15-Year Fixed-Rate Mortgage: Averaged 5.96%, down from 6.10% the previous week.

The graph below illustrates the year-long trend in mortgage rates.

Insights for Buyers, Sellers, and Investors

For Homebuyers: Declining mortgage rates and a strong job market present a good opportunity to consider purchasing. Keep a close watch on upcoming inflation reports to anticipate potential shifts in borrowing costs.

For Sellers: Despite a modest increase in unemployment, the economy’s overall strength supports continued housing demand. Tailoring your pricing strategy to local market trends can maximize results.

For Investors: The stock market remains resilient, particularly in tech-focused indices like the Nasdaq. Lower bond yields could signal more favorable borrowing costs, which may influence investment decisions in real estate and other long-term assets.

Stay updated with the latest reports to make well-informed decisions in this evolving economic environment. For personalized advice, connect with me at the number below.

Have a wonderful week ahead,

Tina Lucarelli - Global Real Estate Advisor

DRE 02102354

(310) 738-8089