In spite of Covid-19, the stock market is sustaining this years all time record high and mortgage rates rise slightly. Is time running out to take advantage of the low mortgage rates?
Stock markets – Stocks advanced further this week after the announcement that Pfizer’s COVID-19 vaccine had proven to be 90% effective. By week’s end other vaccine manufactures also reported that they were experiencing similar results. The Trump administration announced that the vaccine will be available to the most vulnerable by the end of the year. Despite COVID-19 cases spiking in across the country, and Europe, the threat of stay at homes orders in some states, anticipation of a vaccine kept investors optimistic.
- The Dow Jones Industrial Average closed the week at 29,471.81, up 4.1% from 28,343.40 last week. It’s up 3.3% year-to-date. (The all-time record high for the DOW was 29,553 on 12, 2020.)
- The S&P 500 closed the week at 3,585.15, up 2.2% from 3,509.44 last week. This is an all-time record close. It’s up 11% year-to-date.
- The NASDAQ closed the week at 11,829.28, down 0.6% from 11,895.23 last week. It’s up 31.8% year-to-date.
U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 0.89%, up from 0.83% last week. The 30-year treasury bond yield ended the week at 1.65%, up from 1.60% last week. We watch bond yields because mortgage rates often follow treasury bond yields.
Mortgage rates – The November 12, 2020, Freddie Mac Primary Mortgage Survey reported mortgage rates for the most popular loan products as follows:
- The 30-year fixed mortgage rate average was 2.84%, up from 2.78% last week.
- The 15-year fixed was 2.34%, almost unchanged from 2.32% last week.
- The 5-year ARM was 3.11%, up from 2.89% last week (this is not a popular product and not many lenders are offering it).
California third quarter home affordability report – Every quarter the California Association of Realtors issues a housing affordability report. They have reported that a surge in home prices made homes less affordable in the third quarter of 2020. They reported that 28% of California households could afford to purchase a $693,680 median priced home in the third quarter of 2020. That brought home affordability down from 33% in the second quarter. It was 31% one year ago. A minimum annual income of $127,200 was needed to qualify for a monthly payment of $3,180. The California Association of Realtors always uses the same formula to remain consistent. It is the principal, interest, property tax and insurance payment on a 30-year fixed rate mortgage with 20% down. The average interest rate in the third quarter was 3.15%. Condominiums and townhomes were more affordable. They found that 42% of California households were able to purchase a $512,000 median priced condo or townhome. An annual income of $94,000 was needed to qualify for the monthly payment of $2,350. Rates were lower at the end of the quarter, but prices were higher. It will be interesting to see what the fourth quarter figures are.
Have a great weekend!
#economicupdate #mortgageratestoday #covid19solutions #covid19vaccines #dowjones #stockmarketnews #realestateagent 