Economic Update | Month Ending November 30, 2024

November marked the best month of the year for stock markets. Ending the month at all-time highs, stock markets began to surge when President Trump won the election, as Investors expect easing regulations and lower corporate tax rates. At the same time bond yields and mortgage rates increased as fears of tariffs and deportations could fuel inflation; however, bond yields and mortgage rates dropped in the last week of the month. Inflation gauges did rise slightly in October. The Consumer Price Index (CPI) showed that consumer process increased 2.6% year-over-year in October, up from a 2.4% year-over-year increase in September. Core CPI, which excludes food and energy prices, increased 3.3% year-over-year, unchanged from September’s annual increase. The Producer Price Index (PPI) also increased in October. It measures wholesale prices which increased 2.4% year-over-year in October, its highest level in 4 months, and up from a 1.9% year-over-year increase in September. The Core PPI level came in at a 3.5% year-over-year increase in October, up from a 3.3% increase in September. The Personal Consumption Expenditure Price Index (PCE) showed a 12-month inflation rate of 2.3%, up from a 2.1% annual rate in September. Core PCE increased 2.8% year-over-year. These increases were in line with analysts’ expectations as increased retail sales, consumer confidence, and other data pointed to the economy picking up.

 

The chart below shows the CPI rate since 2021. Even though it moved up last month, it’s still much lower than it has been over the past two years.

Stock Markets -The Dow Jones Industrial Average closed the month at 44,910.65, up 7.5% from 41,763.46, on October 30, 2024. It is up 19.2% year-to-date. The S&P 500 closed the month at 6,032.38, up 5.7% from 5,705.45 last month. It is up 26.5% year-to-date. The NASDAQ closed the month at 19,218.17, up 6.3% from 18,085.15 last month. It is up 28% year-to-date.

U.S. Treasury bond yields – The 10-year treasury bond closed the month yielding 4.18%, down from 4.28% last month. The 30-year treasury bond yield ended the month at 4.36%, down from 4.47% last month. We watch bond yields because mortgage rates often follow treasury bond yields.

Mortgage rates – Mortgage rates jumped in October on fears of inflation picking up in future months based on stronger economic reports. Every Thursday Freddie Mac publishes interest rates based on a survey of mortgage lenders throughout the week. The Freddie Mac Primary Mortgage Survey reported that mortgage rates for the most popular loan products as of November 27, 2024, were as follows: The 30-year fixed mortgage rate was 6.81%, up from 6.72% at the end of September. The 15-year fixed was 6.10%, up from 5.99% last month.

Home sales data is released on the third week of the month for the previous month by the California Association of Realtors and the National Association of Realtors. These are October’s home sales figures.

U.S. existing-home sales October 2024 – The National Association of Realtors reported that existing-home sales totaled 3.96 million units on a seasonally adjusted annualized rate in October, up 2.9% from an annualized rate of 3.85 million units last October. That marked the first year-over-year increase in sales in 3 years. The median price for a home sold in the U.S. in October was $407,200, up 4% from $391,600 one year ago. There was a 4.2-month supply of homes for sale in October, up from a 3.6-month supply one year ago. First-time buyers accounted for 27% of all sales. Investors and second-home purchases accounted for 17% of all sales. All cash purchases accounted for 27% of all sales. Foreclosures and short sales accounted for 2% of all sales.

October California existing-home sales report – The California Association of Realtors reported that existing-home sales totaled 264,870 on an annualized rate in October, up 4.7% from 253,010 homes on an annualized rate in September, and up 5.8% from a revised 241,910 homes sold on an annualized basis last October. The statewide median price paid for a home in October was $888,740, up 2.4% from $868,150 in September, and up 5.8% from $839.990 one year ago. There was a 3.1- month supply of homes for sale in October, down from a 3.6-month supply of homes for sale in September, but up from a 2.7-month supply in October 2023.

The graph below lists home sales data by county in Southern California.