Aug 10, 2017.
What do you really pay? US Treasury & Mortgage rates in comparison with Inflation.
Inflation, the really big elephant in the room, plotted with US Treasury bond yield rates and Mortgage rates. Inflation, the rate as which prices increase, eats into any appreciation into our assets. So at 1.6% inflation (in June 2017), any money invested in 10 year treasury bonds are effectively only earning 0.7%. On the upside though, it makes the effective ‘interest’ one pays on 15-year mortgage to 1.6% (instead of 3.2%). Note the almost 0% inflation in 2015 when there were no price increases & the 3.7% inflation in 2011 when effectively the 15-year mortgage was cheaper than cash. If the inflation stays comparable to 10-year treasury (as in 2017) the return from these bonds is effectively zero. Therefore, pension funds and insurance companies, which are required to buy them in their portfolio, will have very low effective returns in future. Click on image to enlarge. Source: Freddie Mac & Federal Reserve & Inflationdata.com & the previous Chart of the day – Aug 9, 2017. Raw data for this chart are here.
Previous charts-of-the-day:
Aug 14, 2017 – Worth of money in parallel worlds, value of $100k invested in Jan 2010 worth in Jun 2017
Aug 13, 2017 – US consumer price index (cost-of-living index or inflation) – (2007-2017)
Aug 12, 2017 – US unemployment rate & wage growth (2010-2017)
Aug 11, 2017 – US home price change by state (1976-2017 & 2016-2017)
Aug 10, 2017 – Inflation plotted with US Treasury & Mortgage rates (2010-2016)
Aug 9, 2017 – US Treasury and Mortgage rates (2010-2016)
Aug 8, 2017 – Household credit score versus time (2001-2016)
Aug 7, 2017 – Monthly mortgage payment across key US metro regions (2012-2016)
Aug 6, 2017 – Good time to buy or good time to sell? Fannie Mae’s monthly Home Purchase Sentiment Index (R)
Aug 5, 2017 – Buy versus Rent – Trulia’s calculator (Apr 2017)
Aug 4, 2017 – Annual change in US home prices across top 20 cities (May 2011- May 2017)
Aug 3, 2017 – Best time to get a deal: time period when best discounts are available in housing market
Aug 2, 2017 – Clark County, Washington state (Portland Metro area, OR) single family home prices (2012-2017)
Aug 1, 2017 – Multnomah County (Portland Metro area, OR) single family home prices (2012-2017)
July 31, 2017 – Washington County (Portland Metro area, OR) single family home prices (2012-2017)
July 28, 2017 – US home prices 1890-present
July 27, 2017 – Median house price for Portland Metro neighborhoods
July 26, 2017 – Average rent for Portland Metro region
July 25, 2017 – Path of total solar eclipse through Oregon
July 24, 2017 – Portland metro area household income by region