It can be hard to make sense of reports about mortgage rates. Last Wednesday, for example, Mortgage News Daily posted a mortgage rate update on their site with the headline, “Mortgage Rates Surge Well Into New 7-Year Highs.” On the following day, Freddie Mac’s website published an article entitled “Mortgage Rates Largely Hold Steady.”
What gives? Is the sky falling or not?
Matthew Graham of Mortgage News Daily, posted a helpful article explaining how mortgage rates are typically reported and why it’s important to do a little digging before accepting any claims about the way mortgage interest rates are trending. In his article, Graham acknowledges that it can be tricky to follow the (literal) ups and downs of mortgage rates, but he claims it is possible to make sense of differing reports as long as you understand a few key facts about mortgage interest rates:
- Mortgage rates are unlike other rates (for example, the 10 yr Treasury Yield). Other rates tend to fluctuate throughout the day and are published in a standardized format in multiple locations. As a result, it’s pretty easy to find the consensus about the direction of other rates, but interpretations frequently differ with mortgage rates, so a lack of consensus is not uncommon.
- Mortgage rates change daily, but the industry benchmark for mortgage rates, Freddie Mac’s Primary Mortgage Market Survey® is a weekly survey.
- The Primary Mortgage Market Survey® is heavily biased towards responses received in the beginning of the week. According to Graham, Thursday’s and Friday’s responses aren’t even figured into the findings, so if something dramatic happens on Wednesday, it isn’t reflected in the reporting until the following week.
Last Week’s Conflicting Reports
This is what happened last week. Rates were holding steady–on Monday and Tuesday, but, come Wednesday, the sky–alas, not mortgage rates–did indeed start falling. Mortgage News Daily was able to catch the surge in mortgage rates, because they were paying close attention to the daily changes to the rates. Other outlets, relying on the (suddenly inaccurate) conclusions drawn from the weekly Primary Mortgage Market Survey,® missed the story.
Time to Act?
If you have been thinking of refinancing your home or buying a new one, this could be your time to act. Just yesterday, Mortgage News Daily published a follow up story confirming a return in mortgage rates to 5%. Don’t hesitate to reach out to the AZ Mortgage Brothers if you need help understanding what’s going on in the market. We can help you decide if now is the right time and craft a mortgage solution tailored just for you if it is.