Important Cliff notes on today’s mortgage rate news (no longer below 5%)
Regular readers are all too familiar with my fairly regular habit of explaining the discrepancy between reality and typical mortgage rate headlines on Thursdays. That’s when Freddie Mac released its weekly mortgage rate survey.
Freddy’s Investigation is the longest running and most deeply rooted catalog of history. mortgage interest rate in the industry. It serves as the basis for strategic market analysis in several sectors. This is the most widely cited source of mortgage rate coverage in the news media. It also relies on certain calculations to determine if a loan violates certain lending laws.
All of the above is very disappointing given how old the information is. , the numbers are waiting for you to report until Thursday at 10am ET!
What was the reason for the delay?
The official response window for the survey will continue until Wednesday. In that sense, a Thursday morning release time makes more sense. Unfortunately, the majority of responses were received by Monday.
Freddie officially states that most responses come in on Tuesdays, which is either incorrect, or responses come in early Tuesday morning before lenders update their rates for the day. This is a longstanding claim of mine, and if there ever was a report to confirm it, it would be today!
The chart above shows the minute-by-minute movement of mortgage-backed securities. MBS Feethe line above is inverted, so the higher the rate, the higher and vice versa).
In short, Monday was the best time possible mortgage interest rate this week. Our own daily figures actually suggested it was even lower than Freddy’s rate, considering the fact that the rate itself takes into account “points” (5.05% on Monday ). Interest rates then exploded on Tuesday, almost reaching over the week’s high of 5.5%. It recovered significantly yesterday and may improve a bit today, but as you can see on the MBS chart, it’s still not back to Monday afternoon levels.
Conclusion: The rate was 4.99% on Monday, probably first thing Tuesday morning. Freddy’s 0.8 points are included in today’s survey because the average lender needs an additional initial cost to reach the high 4, but is rarely seen in mortgage rate headlines. There is none. The historically extreme impact of ‘point’).
The “point” conclusion: If you didn’t click the link above, be aware that the extra points for upfront costs (1% of your upfront loan balance) are worth more than most other moments in history. Points historically reduce rates by 0.25%. Now, in most cases, it’s at least twice that of him. Even before today’s improvements, the most aggressive lenders were offering 4 higher interest rates by including points in the initial cost. We do not judge the value of points as good or bad. They simply represent a choice to pay “over time” or to pay now. A key argument against points is that you may want to refinance before you hit breakeven at the extra cost.