There are many different ways to track mortgage rates and several different sources quoted in the news. For decades, the most prevalently-quoted source has been Freddie Mac’s weekly primary mortgage market survey. It consists of a questionnaire sent out to loan officers at the beginning of every week. They can respond as late as Wednesday, but the responses are heavily front-loaded (most respondents simply fire right back when they see the email).
As such, Freddie’s weekly rate survey, which is reported every Thursday, is best thought of as measuring the change in top tier mortgage rates from one Monday to the next, perhaps with some Tuesday influence sprinkled in. That’s fine on weeks where there isn’t much volatility, but it can end up sending very mixed messages otherwise. Much of 2022 has been “otherwise” and today is not only no exception, it’s probably the starkest example.
Freddie’s survey showed an increase from 3.55 last week to 3.69 this week. This assumes a best case scenario 30yr fixed with 0.8 points paid upfront. I don’t love the idea of building points into rate indices if points can change over time. I’d rather just adjust the rates to reflect the points since there’s reliable math for that purpose.
For example, at most lenders right now, you’d pay 1 point to drop the rate by 0.25%. If Freddie made that adjustment, their 3.69 would rise to 3.89. But remember, that would have applied to Monday/Tuesday based on Freddie’s methodology. Lo and behold, the rates I calculate every day were at 3.87% and 3.89% on Mon/Tue respectively.
All that to say that our daily rate is reliably in line with the industry standard, but on an up-to-the-hour basis (I adjust mid-day if rates change) as opposed to once a week. I never go to lengths to explain this reliability because it’s one of those “is what it is” sort of things in my mind. I only do it today because our daily rate is quite the departure from Freddie in addition to being just a hair above a significant psychological ceiling.
In case it wasn’t already clear based on the headline, the average is currently up to 4.02%. Keep in mind that is is an average among top tier scenarios. It means that some lenders are quoting 3.625% and others are up to 4.375%. Adding any complexity to the scenario would mean a different rate. Also keep in mind that lenders are MUCH more widely stratified than normal, which is often the case when we’ve seen as much volatility as we have so far in 2022.