What the Trump Effect Means for Mortgage Rates Next Year and 5 Years From Now

By Hal Bundrick, CFP

In the week following the election, mortgage rates soared nearly half a percentage point. Average weekly 30-year fixed home loan rates are back above 4% for the first time since July 2015.

Here's a three-minute read on the Trump Effect -- past, present and future -- on mortgage rates.

What happened to mortgage rates right after the election
Investors sold bonds on President-elect Donald Trump's stated goals to lower taxes, boost deregulation and make massive infrastructure investments. A growing economy fueled by government spending could trigger higher inflation, which is a concern for the bond market.

As bond prices fell from the sell-off, yields rose. Higher bond yields equal higher mortgage rates.

What is happening with mortgage rates now
Rates are already taking a breath. After a quick run-up following the election, 30-year mortgage rates are generally holding steady, near 4%.

What will happen to mortgage rates in 2017
The Federal Reserve this week reaffirmed its intention to begin raising short-term interest rates, most likely beginning in December. Following that hike, if it happens, the U.S. central bank's policy-setting Federal Open Market Committee is looking to manage a slow climb in rates.

"The FOMC continues to expect that the evolution of the economy will warrant only gradual increases in the federal funds rate over time to achieve and maintain maximum employment and price stability," Fed Chair Janet Yellen told Congress on Nov. 17. Those moves will influence longer-term rates such as on mortgages to rise as well.

And there's another potential trigger for mortgage rates to move higher.

While Trump hasn't taken a stance yet, Republican party leaders have been vocal about getting the government out of the mortgage business. That could mean redefining the role of the Federal Housing Administration and moving Fannie Mae and Freddie Mac to the private sector.

David Reiss, a professor at Brooklyn Law School, concentrates on real estate finance and community development. He sees the Republican agenda to "reduce the government's footprint in the mortgage market" as a possible catalyst to higher mortgage rates in the future.
"You put the government's stamp of approval on companies like Fannie and Freddie, and it lowers interest rates because they can borrow at a lower rate -- but then the taxpayers are on the hook if things go south, and that was the case in 2008," Reiss tells NerdWallet. "If you reduce the federal government's role in the housing markets, you're going to reduce the likelihood of future bailouts by taxpayers. That's the trade-off."

How high will rates go in the coming year?

"I think you could see rates a half a percent higher from where they are now," says Brian Koss, executive vice president of Mortgage Network in Danvers, Massachusetts. "There's potential for three-quarters to a full point higher."

"We're not jumping to rapid conclusions in our forecast scenario," Douglas Duncan, chief economist of Fannie Mae, tells NerdWallet. "Right now, we've got mortgage rates for 2017 averaging below what the actual numbers are today."

Duncan says Fannie Mae's November forecast is for 30-year rates to average 3.6% in 2017.

Mortgage rates in 5 years
Ten-year Treasury yields, a commonly used benchmark for mortgage rate trends, have soared in the past week, currently yielding about 2.25%. Mortgage rates have mirrored that rise.

Noted bond investor Jeffrey Gundlach, founder and chief investment officer of DoubleLine Capital, predicted Trump's victory in January. In a conference call with investors on Nov. 15, Gundlach made another bold forecast: 10-year Treasury yields could be 6% within five years.

In July 2000 -- the last time 10-year Treasury yields were at 6% -- 30-year mortgage rates were just above 8%.

Perhaps it's a worse-case scenario, but 8% would put us back to the average mortgage rate for the past 44 years.

Hal Bundrick is a staff writer at NerdWallet, a personal finance website. Email: hal@nerdwallet.com. Twitter: @halmbundrick.

Quality in Digital Advertising: Why We Need A Better User Experience Now

John Murphy, VP of Marketplace Quality, OpenX

Think back, way back, to the early 2000s. Odds are you remember the home page takeovers and painfully irrelevant pop-ups that interfered with your browsing incessantly. We've made a lot of progress over the last decade and a half but even as we succeed at finding new ways to improve digital advertising, new threats have emerged. Malware. Forced redirects. Auto-play audio and video. All of these threats weaken the consumer experience, and ultimately drive them away from publishers.

At many of the biggest advertising events this year, including Cannes and Advertising Week NY, industry players expressed concerns about ad quality and performance. To create an improved user experience that leads to a better ROI, publishers, brands, and technology partners in the middle must all deliver better ads — ones that aren't intrusive and disruptive, but engaging and highly relevant to consumers' current wants and needs.

Zero In On Ad Quality

To some extent, ad quality is subjective; good ads are in the eye of the beholder (or in this case, the consumer). But clearly there are forms of advertising that are objectively bad for the user experience. Display ads that block content or are unsafe (like malware) are plainly unacceptable. They interfere with the publisher-user value exchange, and that can create negative feelings toward both the site and brand.

Another aspect of online advertising that consumers tend to scrutinize is speed. Thanks to fast-loading apps, consumers’ expectations for online and mobile ad experience are constantly rising. It's one of the reasons why many users have resorted to employing ad blockers. To your audience, ads that slow down their experience can be as objectionable as those that might put them at risk. The ultimate goal for sellers and buyers should be to create engaging messaging while also improving ad performance: delivering relevant ads fast. Publishers and technology platforms can help indirectly by educating advertisers on the importance of knowing the weight of an ad and how it could impact load times and user experience.

Mitigate the Effects of Malware

Malicious software is a blight on the digital marketing landscape that continues to spread. Converting publishers from passive players to active participants in improving ad quality and getting full industry buy-in will help to incapacitate malware, but it isn't enough. For example, if a publisher is using the latest browser and operating system, the risk of an attack is much lower, but with programmatic now representing more than two-thirds of all US digital display ad spending, malware can target systems that aren't up to date.

The solution? Many premium publishers are now working with monitoring companies like The Media Trust, on both security and user experience. After that, sites should align themselves with a trustworthy monetization partner for their targeted programmatic campaigns, as this approach protects publishers and brands alike.

The Future of Advertising is Bright

Many wonder what the future has in store. Can we really do enough to effect change? The fact is that today countless publishers aren't fully aware of the types of ads that are running on their sites, how these ads affect page load times, and how they might be degrading the user experience. This lack of insight dramatically reduces their ability to improve the advertising experience, and will continue to do so in the months and years to come.

It's important, therefore, that publishers become active, informed participants in improving ad quality. Take a closer look at what you're putting out into the online world, and prioritize quality assurance and optimization to create a better ad experience for all. The adtech industry can help this along by empowering publishers with better controls and greater visibility into ads that are running to ensure that users are satisfied and that the integrity of the ad marketplace is preserved.

Since the early days of digital publishing, publishers have grappled with the issue of trust. In order to build a loyal audience that's of value to their advertisers, publishers must deliver appealing, informative content that consumers can rely on. At the same time, to maintain their user base and keep consumers coming back, publishers have to serve ads that accurately reflect audience preferences and behavior.

The common thread that ties these two efforts together is quality: quality content, quality ads, and a high-quality user experience. Achieving this doesn't fall to individual publishers, brands, or ad exchanges. Rather, it's a mission for the industry as a whole.

So let's get started.

9 Types of People Who Never Succeed At Work

Experience and knowledge are rapidly losing their relevance to success in the workplace. Harvard economist David Deming studied workplace tasks from 1980 to the present day and found that those that emphasize social skills grew by a whopping 24%, while tasks requiring technical know-how and intelligence experienced little growth. Deming also found that salaries increased the most for jobs that place extra emphasis on social skills.

With the increasing emphasis on social skills, those who lack them stand out like a zebra in a field of horses. We all know the types: the person who won't stop talking when you're trying to meet a deadline, the one who blatantly takes credit for your ideas, or the one who callously leaves you to pull an all-nighter to fix their mistake. The list goes on.

There are a lot of otherwise intelligent people out there who can't stop shooting themselves in the foot. Sadly, their lack of self-awareness and social skills are massive detriments to their careers.

Social skills and self-awareness are matters of emotional intelligence (EQ), and TalentSmart's research with over a million people has shown that emotional intelligence is responsible for 58% of job performance. Those who lack emotional intelligence are at a significant disadvantage.

"Failure isn't fatal, but failure to change might be" - John Wooden

There are certain types of people whose lack of emotional intelligence harms their careers more than others. By studying them, you can avoid becoming one of them, and, if your reading experience is anything like my writing experience, you'll see bits of yourself in some of these profiles. Use that knowledge to build your self-awareness, make adjustments, and grow as a person.

1. The coward. Fear is an extremely powerful motivator. This is why presidential candidates tell people that their opponent will "destroy the economy" and advertisements warn that "smoking kills." In the workplace, people overcome by fear resort to irrational and damaging behavior. Cowardly colleagues are quick to blame others and to cover up important mistakes, and they fail to stand up for what is right.

2. The Dementor. In J. K. Rowling's Harry Potter series, Dementors are evil creatures that suck people's souls out of their bodies, leaving them merely as shells of humans. Whenever a Dementor enters the room, it goes dark and cold and people begin to recall their worst memories. Rowling said that she developed the concept for Dementors based on highly negative people--the kind of people who have the ability to walk into a room and instantly suck the life out of it. Dementors suck the life out of the room by imposing their negativity and pessimism upon everyone they encounter. Their viewpoints are always glass half empty, and they can inject fear and concern into even the most benign situations.

3. The arrogant. Arrogant people are a waste of your time because they see everything you do as a personal challenge. Arrogance is false confidence, and it always masks major insecurities. A University of Akron study found that arrogance is correlated with a slew of problems in the workplace. Arrogant people tend to be lower performers and more disagreeable and to have more cognitive problems than the average person.

4. The group-thinker. Group-thinkers choose the path of least resistance and are famous for propagating the "this is how we've always done it" mentality. If you find yourself getting brainwashed with what everyone else believes, be careful; the status quo never leads to greatness.

5. The short-changed. The short-changed are quick to blame their lack of accomplishment on a lack of opportunity. While a lucky break may put a little wind in a successful person's sails, they got where they are through hard work. What the short-changed don't realize is that their attitude is what's short-changing them, not their circumstances.

6. The temperamental. Some people have absolutely no control over their emotions. They will lash out at you and project their feelings onto you, all the while thinking that you're the one causing their malaise. Temperamental people perform poorly because their emotions cloud their judgment and their lack of self-control destroys their relationships. Be wary of temperamental people; when push comes to shove they will use you as their emotional toilet.

7. The victim. Victims are tough to identify because you initially empathize with their problems. But, as time passes, you begin to realize that their "time of need" is all the time. Victims actively push away any personal responsibility by making every speed bump they encounter into an uncrossable mountain. They don't see tough times as opportunities to learn and grow from; instead, they see them as an out.

8. The gullible. You can't help but feel sorry for the gullible type. They're the ones who find themselves babysitting the boss's kids the morning after pulling a late night of work . . . on a Sunday! For whatever reason, gullible people (often newbies) go with the flow until the gentle river becomes a tumultuous ocean. It's okay to negotiate your salary, it's okay to say no, and it's okay to question the way things are done. You'll earn a lot more respect if you stand up for yourself when the time is right.

9. The apologizer. For every person out there who owes an apology, there's another who apologizes too often. People who lack confidence are always apologizing for their ideas and actions. They fear failure and believe that apologizing will act as a safety net. Instead, unnecessary apologies cheapen their ideas and make them less likely to stick. It's important that your tone of voice and body language reflect the importance of your ideas. Stating an idea or opinion as a question is just as bad as apologizing. If you really believe something is worth sharing, then own it and share it with confidence.

Bringing It All Together

None of these behaviors are a career death sentence because they can be eradicated through improved emotional intelligence. All it takes is a little self-awareness and a strong desire to change.

What other types of people belong on this list? Please share in the comments section below, as I learn just as much from you as you do from me.

Elon Musk Biographer Calls Wall Street Cynicism 'Depressing And Ignorant'

When Elon Musk announced his bid to merge his two publicly traded companies into one, Wall Street recoiled.

On the face of it, the billionaire Silicon Valley titan wanted to marry Tesla Motors’ battery storage technology with SolarCity’s solar panels and software, creating a vertically integrated clean energy juggernaut. But both companies burn through cash and face significant headwinds as Tesla struggles to deliver its cars on schedule and a finicky solar market lashes SolarCity. The boards are stacked with Musk’s family and allies, threatening to make such a deal a “corporate governance nightmare.” Last month, four lawsuits were filed against Tesla for breaching fiduciary duty by offering to buy SolarCity. Was this a bailout for SolarCity? Would this further delay investors earning a payday through dividends? 

Those concerns are likely to come to a head over the next five weeks as both companies gear up for a Nov. 17 shareholder vote on whether to approve the deal. But fears over the future of Musk’s business empire, which also includes privately-held rocket company SpaceX, may be misplaced, according to biographer Ashlee Vance.

“As someone who has spent years studying Musk, though, I find such a future unlikely and also find the cynicism that surrounds Musk somewhere between depressing and ignorant,” Vance, who published the meaty 400-page Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future in May 2015, wrote in Bloomberg Businessweek on Wednesday. 

He continued:

At every point where his companies seem to be on stable footing, Musk takes on more and promises more, erasing the memory of past gains. He might now be addicted to one-upping himself.

Wall Street and casual onlookers often find Musk’s approach abhorrent, and this makes perfect sense. They want consistent earnings-per-share figures and straight talk, while he’s in an inventive fugue state more concerned with trying to save mankind from oblivion. Musk lives in a way that few of us would choose and has a tolerance for risk that would drive most of us nuts. It’s precisely because Musk has operated his companies on the edge of what’s possible that he has achieved so much.

Vance, however, is no blind champion of Musk. His biography provided among the most sober assessments of the celebrity businessman yet. The book included some ugly details about a man often lionized as a sort-of tech messiah, bent on weaning the world off oil and coal and sending human colonists to Mars. One in particular ― an anecdote about Musk berating a male employee at Tesla for taking time off to witness the birth of his child ― seemed to ruffle Musk’s feathers. After the book came out, Musk ― who denied the claims on Twitter ― apparently stopped speaking to Vance, according to a report in Motherboard.

Still, Vance said it’s impossible to ignore the imprint the South African-born entrepreneur has already left on U.S. industry. 

“With advances in cars, energy, and space exploration, Musk has ushered in a new industrial age,” Vance wrote. “The world of machines and infrastructure suddenly looks poised to advance at a rapid clip. It does not seem hyperbolic to suggest that Musk has played a major role in changing the world.”

It’s difficult to say whether transforming his electric car company into a 21st century energy giant will expand that imprint. But it does seem likely that shareholders will greenlight the SolarCity merger.

After all, a bet on Musk’s companies is usually a bet on Musk himself.

“If you don’t believe in Elon,” David Whiston, an equity strategist covering car companies for the Chicago-based research firm Morningstar, told The Huffington Post in August, “why are you buying these stocks in the first place?”

The 25 Big Cities Where Your Paycheck Will Go The Furthest

Finding a job with a decent salary is a goal for many people, but maybe even more important is finding a place to live where your entire paycheck won’t be eaten up by housing costs.

An analysis from jobs site Glassdoor looked at the 50 biggest metro areas to see where your paycheck will go the furthest. To do so, the team compared local median salaries to local median home prices to come up with a cost of living ratio for each city. The higher the ratio, the better off you’d be financially.

If you want to get the most bang for your buck, you should consider looking for jobs in the Detroit area, according to Glassdoor, and you won’t have any luck on the West Coast. Here are the other 24 metro areas where your paycheck goes the furthest:

Glassdoor’s analysis doesn’t account for other living costs, such as transportation ― definitely a big one in Detroit, which has the highest rates for car insurance in the country.

“Though there are certainly other financial factors to consider when taking into account total cost of living, this data reinforces that pay typically goes further in mid-sized cities versus big metropolitan areas where there is often tighter competition for housing,” Andrew Chamberlain, Glassdoor chief economist, said in a statement.  

Read More:

• Here's How Much $100 Is Worth In Each State
• Here's How Much Money You Need To Make To Buy A Home
• Here’s How Much Income You Need To Afford Rent In Every State

Glassdoor determined the typical salary from reports users shared on the website from April 2015 to April 2016 ― at least 1,000 for each metro area. The median home prices come from the Zillow Home Value Index.

Nationwide, the biggest expenditure for families is housing, the Glassdoor report notes. About a third of Americans spend more than 30 percent of their income on housing costs, according to Harvard University’s Joint Center for Housing Studies. Spending 30 percent or less of your income is the amount typically deemed affordable, meaning a third of the country is struggling to afford housing.

Now you know a few places where it might be less of a struggle.  

The Meaning of Inclusive Capitalism by Michael Latimer, President and CEO, OMERS

Michael Latimer
President and CEO, OMERS

From my lens as the CEO of one of Canada's largest defined benefit pension plans, inclusive capitalism involves the meaningful cascade of value that is created through long-term, efficient and diversified investing. My role gives me a unique vantage point, both in terms of a window on global capital markets, as well as the perspective of our hard-working members. They range from police and fire fighters, to librarians and municipal sector workers.

At OMERS, our accountability is to provide a secure, stable and predictable source of income to our members at retirement. We treat every dollar we invest on their behalf as if it were our own. We call this approach 'value for pension dollars' - making carefully researched and thoughtful decisions, and keeping the obligation we have to our members top of mind throughout the process.

Our strategy involves building a diversified, low-cost portfolio invested around the world in leading companies, infrastructure and real estate. These are attractive assets that would be very difficult for our average member to invest in individually

However, it goes both ways. Our members, with the financial security of a stable source of income in retirement, provide our economy with additional stability. Research we've done has shown that our members end up contributing to their local economy and the broader economy through taxes and spending throughout their retirement.

At OMERS, we fundamentally believe in the importance of retirement security, and that it contributes to economic inclusiveness. I believe this is a true example of inclusive capitalism, and one that can be a source of ideas for expanding the benefits that our economic system can offer to a much broader group of people.

We Buy A Staggering Amount Of Clothing, And Most Of It Ends Up In Landfills

This article is part of HuffPost’s “Reclaim” campaign, an ongoing project spotlighting the world’s waste crisis and how we can begin to solve it.

“Too much of a good thing can be wonderful,” Mae West, the Hollywood actress and style icon, once famously quipped.

At a casual glance, you might think her quote would accurately describe the fashion industry. The availability of an endless supply of cheap clothing has unleashed a whirlwind of color and beauty, giving people the chance to express themselves ― even on a tight budget ― and stamp their identity on the world.

But the dark truth about the fashion business is that too much of a good thing is creating environmental destruction and human misery on an unprecedented scale.

Let’s be clear: There is nothing beautiful in seeing a river polluted by toxic dyes or a garment worker surviving on a pittance while toiling in dangerous sweatshop conditions.

The merry-go-round of new apparel ranges the industry spews out at a dizzying rate is fueling an addiction to clothes and a perceived need to constantly be at the cutting edge of fashion. As a result, people around the world collectively consume more than 80 billion items of clothing each year, and those items are increasingly seen as disposable.  

We need to slow things down and become more aware of the negative impacts of our actions. That does not mean taking the fun out of buying clothes. It just means becoming less impulsive in our shopping habits and thinking twice before paying $4.99 for another cheap top to add to our already cluttered closets.

In order to help in this process, The Huffington Post is today launching the second stage of our “Reclaim” campaign, which aims to examine and fight the world’s waste crisis. For the past two months we have focused on food waste, creating more than 180 articles and more than 20 videos. We will now be putting our attention on fashion.

The facts speak for themselves. Fashion is considered to be one of the most polluting industries in the world, and the 1,135 people who died in the 2013 collapse of the Rana Plaza building in Bangladesh are a constant reminder of the terrible conditions suffered by millions of garment workers around the globe.

Andrew Biraj / Reuters

People rescue garment workers trapped under rubble at the Rana Plaza building after it collapsed April 24, 2013.

Americans alone produced 15.1 million tons of textile waste in 2013, and around 85 percent of that ended up in landfills, according to the Environmental Protection Agency.

On average each American throws away roughly 70 pounds of clothing and other textiles per year, equivalent in weight to more than 200 men’s T-shirts. 

The scale of waste is no great surprise when you consider that retailers tend these days to focus more on price than quality, which means many garments may survive only a few washes. More than this, the constant change of styles leads to heavy markdowns as retailers need to get rid of stock to create space for the newest styles.

Those clothes that don’t get thrown away often end up in cheap markets in the developing world. This ever-growing mountain of garments prompted five East African countries earlier this year to announce they are considering banning the import of secondhand clothes because their own domestic garment industries have no hope of competing against them.

While the scale of the industry’s problems are immense, the good news is that there are many solutions out there and many more in development.

We are seeing an immense amount of innovation, ranging from the development of less toxic materials, to new technologies that can transform old clothes into new garments, in a similar way to paper recycling.

Environmental organization Greenpeace is campaigning for the apparel industry to eradicate toxic chemicals, and there is increasing pressure for garment workers to be given a living wage to support themselves and their families.

There is also an emerging movement, supported by organizations such as Fashion Revolution, to find alternatives to buying new clothes. These range from going to thrift stores, swapping clothes with your friends or work colleagues, and renting clothes for a special occasion.

Though retail giants seem unable to break out of the fast fashion system they have created, a number of them are taking action to make their products more sustainable. Nearly three-quarters of Nike’s footwear now contain materials made from waste products from its own manufacturing process; H&M is investing in new recycling technology and offering in-store collection points, where customers can deposit old clothes.

But much more needs to be done. First and foremost, the big fashion companies need to be more transparent about the environmental and social impacts of the products they sell. It’s no wonder customers keep shopping to the max if they don’t feel any connection between what they buy and the environmental and social impacts, which disproportionately play out in developing countries, where regulations tend to be lax and the public’s gaze doesn’t often turn.

Even if a piece of clothing is made from organic cotton, the customer has no idea of whether the factory that produced it treats its workers fairly or whether the dyes used are polluting local rivers.

But while the fashion industry has a clear responsibility to take action, just as important is the need for every one of us to become more responsible about the amount of clothing we buy. That means taking a moment to breathe every time we get tempted by the latest fashion ― or enticed by a new markdown ― and asking ourselves a few very simple questions: Do I really need this, will it make me happy and will it make the world more or less beautiful?