Market Update: September 2018

investment advisory services historical yield and indic rates September 2018  

Rising Costs Impacting Home Sales

Rising home prices and higher mortgage rates appear to be impacting home sales nationally. According to a national home price index, home prices have increased by over 6.3% in the past year. Meanwhile, the US 30-year fixed mortgage rate has increased from about 4.0% a year ago to over 4.6% in August 2018. These higher costs have resulted in a 1.5% decline in existing home sales over the past year. Existing home sales declined in the Northeast, Midwest and South in July. Only the West saw a monthly increase. New single family home sales fell 1.7% for the month in July. Positively, though, new single family home sales were up 12.8% on a year-over-year basis.

Source: Bloomberg, S&P Global Market Intelligence


Stocks Reach Record Highs

U.S. stocks have reached a new bull market record as stocks soared in August. Recent stock gains have been attributed to strong corporate earnings, positive sentiment and possibly have been aided by trade negotiations. Concerns about a global trade war have pushed European and Asian markets lower the past few months. Inflows into US assets could be interpreted as the market taking views on who will benefit from tariffs, with the US appearing strongest. However, the US gains have arrived just in time for September which is a time of the year that market volume increases and volatility has historically been higher. Weakness in emerging markets, softening home prices and uncertainty around trade could all push markets lower in the months ahead.

Source: Wall Street Journal, Bloomberg

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