Financial Markets- Bonds (Mortgage Rates)
Its been several months since my last market summary and the financial markets have functioned traditionally in the sense that as stock prices have risen so too have bond yields (and mortgage rates for that matter). The S & P 500 has been on a heater since the end of March. Today, the S & P 500 index is just over 7,400. This marks a roughly 15% increase in just over 3 months. This is glorious for our 401k’s and investment accounts.
https://www.cnbc.com/quotes/.SPX
The down side for those in real estate is that bond yields have risen as a similar fashion. As a reminder, mortgage rates are tied to certain bonds in the bond market, so as bond yields rise, mortgage rates rise as well. The 10 Year US Treasury rose from roughly 4% to 4.55% where it sits today. The spread between the average 30 year fixed rate mortgage and the 10 year US Treasury is around 2-2.25%. As yields rise, the spread between the average 30 year fixed and the 10 year US Treasury widens, so it’s a bit of a double whammy.
The average 30 year fixed rate mortgage is now around 6.75%. Much of the bond yields can be attributed to the war in Iran and its impact on oil prices. As oil prices rise it stokes fear of inflation and bond yields are highly sensitive to inflation. As an example, if inflation rate is say 5%, well investors expect a rate of return of say 7% so that their investment outpaces inflation and results in a modest rate of return on the investment. There appears to be no resolution on the horizon so the path to lower mortgage rates can only be accomplished by other nations ramping up oil production…But oil companies don’t seem to mind the higher prices of oil sooooo….I think this is where rates will be for the foreseeable future.
https://www.cnbc.com/quotes/US10Y
Southern Nevada Real Estate
Home sales for Clark County NV are tracking for even less sales than 2025, which I didn’t think was possible, yet the median priced home is still holding up, even increased in May to $490,000. This is pretty remarkable and anyone holding their breath for lower home prices will have passed out by now.
May Home Sales
- Total: 3,101. Year to date is 13,791. Down from 14,218 in 2025, down from 15,115 in 2024, down from 15,137 in 2023.
- Condos: 290
- Townhomes: 368
- Single Family Residences: 2,443
- Inventory = 9.503…when divided by resale SFR sales we come up with 4.6 months supply of homes)
- Median Priced Home $490,000.
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