Don't Trust This Week's Mortgage Rate Headlines! (Except This One)

Most of the following is an updated version of the same coverage from yesterday.  Little changed today apart from the big jobs report pushing rates higher yet again.  This only exacerbates the problem addressed in yesterday’s commentary. Without a shadow of a doubt, the average lender’s mortgage rates are noticeably higher this week versus last week, with Friday being the worst of the bunch.  Despite that fact, there were multiple news stories this week regarding a massive DROP in rates.  What’s up with that? Before we continue, you may wonder who you can trust if you’re getting two entirely different stories.  Thankfully, you can trust both stories!  The one about lower rates simply needs some qualification.   This week’s misleading headlines are invariably a result of Freddie Mac’s weekly mortgage rate survey.  This is the longest-running and one of the most highly regarded records of interest rate movement over time.  A majority of news organizations rely on it as the primary source for their once-a-week coverage of rates. During more normal times, this strategy is good enough. The mainstream consumer of financial news doesn’t particularly need a new update on rates every day (unless they’re home shopping). And Freddie’s data does a great job of capturing the broad, long-term trends in rates. Unfortunately, it does a terrible job of capturing rate changes when bonds are experiencing high volatility, especially if that volatility occurs during the last 3 days of the week.  
Source: mortgagenewsdaily.comNew feed