The stock market's venerable benchmark, the Dow Jones Industrial Average, just made history – it passed the 40,000 mark for the first time.

Yes, this milestone, set on Thursday May 16, is just a brief emotional victory for shareholders. Still, it can be viewed as a historic milestone for the overall business climate, particularly in California.

To mark this moment, the trusted spreadsheet reviewed the Dow's 5,000 points and how California performed during those periods using an economic metric (California unemployment), an interest rate (the average 30-year fixed-rate mortgage), and of the California Real Estate Prices Association of Real Estate Agents.

To begin our data-rich journey, we'd like to point out that the Dow Jones first exceeded 5,000 in November 1995 – back when you could buy a California single-family home at the median price of $176,000.

5,000 point milestone

Dow crosses the 10,000 mark in December 1999: It took just over four years for the stock index to double from 5,000, compared to a 28% increase for California homes to $225,000 over the same period. This was an era in which the economy woke up from its early 1990s slumber. Unemployment in California fell from 7.9% to 5% between 1995 and 1999, while mortgage rates rose from 7.4% to 7.9%.

15,000 in May 2013: It took the Dow more than 13 years to gain 50% to reach that level, while home prices nationwide rose 85% to $417,000 during the same period. This extended gap arose during the financial roller coaster ride from the bubble phase of the early 2000s through the Great Recession to the slow recovery of the economy. California's unemployment rate was 9.2%, compared to 5% at the start of this crazy time. But cheap money was a consolation: mortgages at 3.5%, up from 7.9% in 1999.

20,000 in January 2017: It took less than four years for the Dow Jones to gain 33% to reach the next 5,000 points, while homes nationwide rose 18% to $492,000 as the post-crash recovery continued. Unemployment in California fell from 9.2% to 5.2% as mortgage rates rose to 4.2% from 3.5% in 2013.

25,000 in January 2018: The Dow took just a year to gain 25% for its next benchmark, while California homes rose 7% to $528,000 as the recovery was well underway. Unemployment in California fell from 5.2% to 4.4%, while mortgage rates fell to 4% from 4.2% in 2017.

30,000 in November 2020: It took nearly three years for the index to gain 20% versus 32% for California homes to $699,000 amid the pandemic's wild business swings. Unemployment in California rose to 9% from 4.4%, but investors cheered historically cheap money like mortgages, which fell to 2.8% from 4% in 2018.

35,000 in July 2021: It took less than a year for the Dow to rise 17% versus 16% for California homes to $811,000 as the pandemic economic recovery was in full swing. National unemployment fell from 9% to 7.4% and mortgages remained cheap – 2.9% compared to 2.8% in 2020.

40,000 in May 2024: It took nearly three years for the Dow Jones to gain 14%, while California home prices rose 11% to a record $904,000 in April. The economy is struggling to find its new normal as national unemployment fell from 7.4% to 5.3% in April. But mortgages became expensive as the Federal Reserve struggled and the economy overheated – 7% in April versus 2.9% in 2021.

Bottom line

The Dow Jones has risen eightfold since crossing the 5,000 mark just over 28 years ago. Houses in California are only five times more expensive.

However, that is not the point. This walk down memory lane reminds us that markets usually need a solid economy for stocks or houses to appreciate in value. Cheap money is the icing on the cake.

Jonathan Lansner is a business columnist for the Southern California News Group. He can be reached at jlansner@scng.com