How to Make Sense of Mortgage Rate Info These Days

Let’s begin today’s rate coverage with a public service announcement about the best way to consume mortgage rate data online.

Lately the day-to-day movements in mortgage rates can be quite difficult to understand. Even after doing as much as possible to ensure an apples-to-apples comparison, there may still be significant changes and discrepancies for any of the following reasons:

• You are viewing rate information that is more than a few hours old (even worse if you replace “hours” with “days”).
• You’re looking up rate information from a specific lender and comparing it to a broad average or a different lender
• You’re viewing a rate quote that relies on advance points to secure a lower rate.
• You are viewing a rate quote for a scenario that includes an LLPA (loan-level value adjustment) imposed by regulators based on certain loan characteristics.

By the time we add up to the many bullet points above, it’s not uncommon to hear that rates are 1.5% higher or lower than what might seem to be the exact same scenario. In general, but especially in times like these, it makes sense to account for as many variables as possible. And although our rate index does a great job of this, you can take it to the next level with one simple strategy:

Forget the rate itself and focus on the day to day activity. In other words, our top-level 30 Year Fixed Index shows that lenders are quoting 6.625% on the right loan today without any price adjustments. Someone with a more average landscape could easily see 7%+. Lenders who compete for web leads with terms in the “fine print” may be as low as one percent. But any scenario at any lender is just as likely to go on infinitely as another scenario at another lender.

Switching gears to today’s movement (that’s what matters after all), rates are higher today than Friday. Most lenders raised rates during the trading day in response to losses in the bond market. In the case of 30-year fixed rates, the average lender was about an eighth of a percent (.125) higher than Friday morning.