Mortgage rates were refreshingly lower at the beginning of the week with most lenders continuing to improve through Tuesday afternoon.  Much has changed since then.  In fact, the average lender is once again above 7% for top tier conventional 30yr fixed rates.   Contrast that to today’s prevailing mortgage rate headline which says something to the effect of “rates fell to 6.66% this week,” and you may wonder who’s telling the truth. The good news is that no one is lying and, by the time we understand the source of confusion, no one is even trying to mislead you.  As is the case on any Thursday, many of today’s mainstream mortgage rate headlines are based on Freddie Mac’s weekly rate index.  Many times, that’s not a problem.  Other times, the survey’s methodology (which Freddie is working on changing) leads to misdirection. Specifically, the survey responses tend to come in on Monday and, to a lesser extent, Tuesday.  Results aren’t reported until Thursday.  As such, any major shift in rates that occurs on Wed/Thu fails to be captured in the data.  Consider those timing considerations in conjunction with this week’s rate volatility (where rates bottomed out on Monday/Tuesday before reversing much higher on Wed/Thu) as well as the fact that the survey rate depends on discount points that often don’t make it into the headlines, and it’s easy to see why the numbers can be so different.   Long story short, if Freddie’s survey was daily instead of weekly, and if it adjusted the rate to factor out upfront points, it too would be over 7% today. [thirtyyearmortgagerates]

Published On: October 6, 2022 / Categories: Mortgage News /