Mortgage Rates Rise To Seven Year High:  Housing Market Review

Thirty-year mortgage rates have surged to the highest levels in seven years, increasing borrowing costs at a time when the housing market is slowing and prices have been falling. The 4.86% conforming rate at the end of October was the highest rate since April 2011, according to data from Freddie Mac. The average 15-year conforming mortgage rate climbed to 4.29% over the same period of time.

Optimism about economic growth has led to higher inflationary expectations, which eventually translate into higher interest rates and mortgage rates. Over the past two years, the yield on the 10-year U.S. Treasury has increased from a historical low of 1.35% in 2016 to 3.15% at the end of October. As a gauge for mortgage rates nationally, the increase in the 10-year Treasury has led to an overall increase in mortgage rates.

Even with the recent rise in mortgage rates, rates are still low on a historical basis. As of this past month, the average mortgage rate since 1971 has been approximately 8.09%. Over the past 46 years, mortgage rates have transitioned from the 5% range in the early 70s to over 14% in the late 70s and early 80s, with the 30-year conforming rate hitting a record high of 16.63% in 1981.

Sources: Freddie Mac, Bloomberg, U.S. Treasury

New Sleep Study Suggests 7-8 Hours is the Sweet Spot:  Healthcare in Retirement

Healthcare in retirement is expensive!  In addition to Medicare premiums, Medigap and Part D expenses (including the increasing  IRMAA surcharge tax) we may also incur assisted living or in-home custodial costs throughout retirement.

These expenses factor into our retirement planning projections and a simple way to reduce these costs is to stay healthy. In addition to basic diet and exercise, a critical component of health care in retirement is adequate sleep. While many people assume that different people need varying amounts of sleep based on genetics or lifestyle, new research suggests otherwise.  A massive study from the Brain and Mind Institute at Western University in Canada, revealed that every adult needs 7-8 hours of sleep (no more no less) to remain mentally limber.

Connor Wild, the lead author of the study, says:

“We found that the optimum amount of sleep to keep your brain performing its best is 7-8 hours every night, and that corresponds to what the Doctors will tell you to keep your body in tip-top shape as well; We also found that people who slept more were as equally impaired as those who slept too little”.