Higher Treasuries Prices Lead to Higher Mortgage Rates

New Fed Chairman's plan to begin raising rates in 2015 causes mortgage pain in 2014.

Mar 27, 2014 at 7:18PM

Freddie Mac released its weekly update on national mortgage rates on Thursday morning and, just as Freddie Mac vice president and chief economist Frank Nothaft predicted last week, rates are on the march back up.

Both 30-year fixed-rate mortgages (FRMs) and 15-year FRMs spiked sharply during the past seven days, with 30-year FRMs gaining eight basis points to reach 4.40%, and 15-year FRMs adding 10 b.p. to hit 3.42%. In both cases, these are the highest rates homebuyers have seen since mid-January.

As has been common so far this year, 5/1 adjustable-rate mortgage (ARM) rates followed the same tack as their longer-duration mortgage cousins, gaining eight basis points and returning to 3.10% -- the highest level since late January. Only one-year ARMs got cheaper, falling five b.p. to 2.44%.

Freddie Mac vice president and chief economist Frank Nothaft had warned last week that with interest rates on 10-year U.S. Treasuries rising, mortgage rates would likely move higher, as well. Today, he confirmed that thesis, blaming "the uptick on the 10-year Treasury note after comments by the Federal Reserve Board Chair Janet Yellen indicated a possible increase in interest rates as soon as early 2015." Adding to homebuyers' troubles, Nothaft noted that housing prices have gotten more expensive by 13.2% during the past year (through January). So in a nutshell, buyers face higher home prices -- and more expensive mortgages to pay for them.


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A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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