Stock markets - On March 10, Silicon Valley Bank failed, and on March 11, Signature Bank died; those were the second and third largest bank failures in U.S. history. Several other banks were on the brink of collapse due to loans made and long-term treasury investments at rates much lower than they are making on current deposits. These assets had dropped in value so much that many banks were under-capitalized. When depositors learned of this, at first through social media, they rushed to withdraw funds. This caused a run on banks, primarily regional banks. Silicon Valley Bank had over $40 billion transferred out of their bank within hours which caused the FDIC to shut them down Friday, March 10. A day later, Signature Bank was shut down. By Sunday, it appeared the regional bank run would cause a systemic collapse of regional banks. The FDIC, Fed, and Treasury Department made the unprecedented announcement that the $250,000 FDIC-insured limit would not apply and that the depositors in the closed banks would receive unlimited insurance so no depositors would lose any money no matter how much they had in the bank. This settled depositors' fears, and the massive number of deposits being transferred from banks slowed. Over the next two weeks, many large banks deposited money into some of the regional banks to help cover the funds that had been transferred to bring their liquidity into compliance. International banks had similar issues. For example, Credit Suisse collapsed, and the Swiss government stepped in and facilitated a sale to UBS.
By month's end, due to quick government action and large banks depositing funds into smaller banks, faith in the banking system was restored. This was an unintended consequence of the rapid rise of interest rates by the Federal Reserve and other international central banks to combat inflation. Stocks that were down sharply during the month recovered and ended higher.
The Dow Jones Industrial Average closed the month at 33,274.15, up 1.9% from 32,656.79 on January 31, 2023. It is up 0.4% year-to-date.
The S&P 500 closed the month at 4,109.31, up 3.5% from 3,970.15 last month. It is up 7% year-to-date.
The NASDAQ closed the month at 12,221.91, up 6.7% from 11,455.54 in previous months. It is up 16.7% year-to-date.
U.S. Treasury bond yields - The 10-year treasury bond closed the month yielding 3.48%, down from 3.92% last month.
The 30-year treasury bond yield ended the month at 3.67%, down from 3.93% last month. We watch bond yields because mortgage rates often follow treasury bond yields.
Mortgage rates lower in March - The Freddie Mac Primary Mortgage Survey reported that mortgage rates, as of March 30, 2023, for the most popular loan products were as follows:
The 30-year fixed mortgage rate was 6.32%, down from 6.50% at the end of February.
The 15-year fixed was 5.56%, down from 5.76% last month.
The jobs report is released on the first Friday of the month. Home sales figures are released on the third week of the month by the California Association of Realtors and the National Association of Realtors. These are January's results.
Employers added 311,000 new jobs in February - The Department of Labor and Statistics reported that 311,000
new full-time jobs were added in February. That was above the 225,000 jobs economists expected. The unemployment rate rose from 3.4%, its lowest rate since 1969, to 3.6% as more workers entered the workforce. The
labor-force participation rate (the share of workers with a job or actively looking for an appointment) was 62.5% in February, its highest level since the pandemic's start, yet still well below 63.4% before the pandemic. Average hourly
wages increased 4.6% from one year ago, up from 4.4% year-over-year in January.
U.S. existing-home sales - The National Association of Realtors reported that
existing-home sales totaled 4.58 million units on a seasonally adjusted annualized rate in
February, down 22.9% from an annualized rate of 5.92 million last February. The
median price for a home in the U.S. in January was $363,000,
down 0.2% from $363,700 one year ago, ending a record 131 consecutive months of year-over-year increases in the median price in the U.S. There was a
2.6-month supply of homes for sale in February, up from a 1.7-month pool last February.
First-time buyers accounted for 27% of all sales.
Investors and second-home purchases accounted for 18% of all sales.
All-cash purchases accounted for 28% of all sales.
Foreclosure and short sales accounted for 2% of all sales.
California existing-home sales - The California Association of Realtors reported that
existing-home sales totaled 284,010 on a seasonally adjusted annualized basis in February,
down 33.2%from 425,120 homes on an annualized basis last February. The statewide
median price for a home in February was
$735,480, down 4.8% from $772,180 in February 2022. There was a
3.2-month supply of homes for sale in February, up from a 2.0-month pool one year ago. February closed sales represent homes that went into escrow in December and January. With so few people putting their homes up for sale, we have seen a dramatic turnaround in the last few weeks. We are seeing multiple offers and bidding wars, as we saw in early 2022. The homes that have gone under contract since mid-February have much higher sales prices than they would have had in November, December, and January. Sales prices in April will be significantly higher as these recent sales close escrow.
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The graph below shows sales data by county in Southern California.
 
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