Month: March 2018

You just bought a house. If you’re like most Americans, it will soon become the largest component of your net worth, and only increase as a percentage over time. Naturally, you would like to see it go up. But by how much? Predicting future home prices is a difficult a game, made complicated by the […]

  • Posted in Housing
  • Comments Off on How Much Should You Expect Your House to Appreciate?

U.S. Mortgage Rates have risen for 9 consecutive weeks, hitting their highest levels since January 2014. Source Data: Freddie Mac That certainly seems like a sharp increase, but is 4.46% high? Only when compared to recent history, which includes the all-time low in yields from November 2012 (3.31%). In a historical context, mortgage rates today […]

  • Posted in Bonds, Housing, Markets
  • Comments Off on Will Higher Mortgage Rates Kill the Housing Market?

At 2.9%, the 10-Year Treasury yield is near its highest level in the past 4 years. At the current rate of inflation (2.2% CPI in the past year), this translates into a real yield of 0.7% (real yield = nominal yield minus inflation). Is such a real yield good or bad value for Treasury bond […]

  • Posted in Bonds, Inflation
  • Comments Off on What Real Returns Should Bond Investors Expect?

Is Cash No Longer Trash?

Short-term bond yields (1-month through 3-years) are hitting their highest levels in over 9 years. Why? The market (Fed Funds Futures) is expecting the Federal Reserve to hike rates 3 more times in 2018: a 25 basis point move in March, a 25 basis point move in June, and a 25 basis point move in […]

Inflation. Deflation. Two words often heard in conversations about the bond market. Why? Because bond investors tend to demand higher yields in periods of higher inflation and lower yields in periods of lower inflation or deflation. Looking at a long-term chart of yields and inflation, the relationship is clear. Data Source: Federal Reserve Economic Data […]