Mailbag: Did The Feds Just Lower Mortgage Rates to 2.66%?

No.

But wouldn’t it be nice… ? YouTube Preview Image

Where was I? Oh, Mortgage Rates…

There’s a lot of stuff floating around out there in the information superhighway. Sometimes, having a little information can lead to confusion or even disappointment when you try to use it to your advantage only to find out it wasn’t quite right in the first place.

What follows is a breakdown of the probable inputs that led up to this question above, and a comprehensive review of what’s really going on with mortgage rates. I may crack wise from time to time, but this post is not meant to be flippant. Part of my job here is to educate and inform, and this is an attempt to do just that. I figure many others are probably wondering the same kind of things, and well, it’s a jungle out there and all that…

The Feds are not in charge

First things first.”The Feds” do not change mortgage rates. And we’re all grateful for this. The Feds investigate crimes, flash badges, and sometimes look for little green men.

The Fed only sets the framework

“The Fed” also does not change mortgage rates. The Fed, or Federal Reserve does set Monetary Policy in the US. They meet every six weeks – or more if needed – to discuss policy, and formally release a policy statement at each meeting. One of the devices they use to set policy, which when changed, is often done so through this policy statement, is the Federal Funds rate. It  sets the tone for all borrowing, but it does not correlate directly with mortgage rates. The Fed released their latest policy statement on Wednesday of this week, and there were no changes to the Federal Funds rate.

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There was an announcement made at this Federal Reserve meeting about something unofficially called “Operation Twist“. This is a temporary program that is designed specifically to lower long term borrowing rates, including mortgages. But even still, The Fed does not set a specific rate. They have set a budget for buying instruments which influence rates – that’s as far as it goes.

Freddie Mac announces averages in a press release

Freddy Mac (not Feddy Mac, the Freddy, etc) issues a weekly mortgage rate survey every Thursday. The one that was released yesterday established a new record low on the average 30 year fixed rate mortgage. The rate in their headline this week was 3.66% (not 2.66%) which is indeed nice and low.

There are a few problems with Freddie Mac‘s number, though, if you’re shopping for mortgage rates and using that as a reference. All you can really with that number is get a relative sense, week to week, of what the market for mortgage rates is doing. The number in the headline is not your rate quote. Here are a few reasons why:

  • The headline number is an average from the preceding few days. It’s old news by the time it gets released.
  • The second paragraph of the press release highlights the cost to get the mortgage at that rate – this week an average of 0.7% points, or 7/10% of the amount being borrowed.
  • The model scenario excludes condos, 2-4 unit buildings, vacation homes, investment properties, and loans above the national conforming limit of $417k

So if you’re in the market for a 2-unit investment property on a high-balance conforming loan, this number simply does not apply. But, if you watch the Freddie Mac survey each week, you’ll see the general trajectory of the market over time. If you want to get the most current rate information specific to your scenario, work with your lender or request a rate quote.

What We’re here for

Making sense of the mortgage market can be really annoying frustrating. After a string of reports on Federal Reserve policy meetings, weekly mortgage rate surveys, and Operation Twist, it’s easy to see how somebody can connect the dots and think that the Fed just lowered rates to some crazy number.  We haven’t even touched on  the continuous drip of data related to existing home sales, new home sales, mortgage application volume, real estate price indexes, inflation, jobs, GDP and others! It’s a lot to keep up with!

If you don’t feel like you’re getting the information you need, or clear answers to your questions, you can always request a consultation.

 

 

 

 

 

Are You Ready for the 2.XX% Mortgage? Are You Sure?

15 year mortgage sets record low
15 year mortgage rates break the 3% barrier

Ahh…

It seems like only yesterday that I was shaking my head in disbelief about mortgage rates heading below 4 percent. That was many mortgage moons ago, way back in September of 2011.

When Mortgage Rates Broke 4.00%

The catalyst at the time was the Federal Reserve announcement about Operation Twist, a program designed to press down on long term interest costs, namely 30 year mortgage rates. It did not take long either; the average rate on a 30 year mortgage fell below 4% in late 2011, and has remained in the 3.XX zone for most of the year so far.

This time, it’s all about Europe.

Mortgage Rates Now Break Below 3.00%

According to the latest survey data, the record low on 30 year fixed rate mortgages was established two weeks ago, and then maintained through last week. But stealing the show last week was a fresh new record low on 15 year mortgage rates. Now officially below the 3% mark at a survey average of 2.97%.

That is an eye-popping number.

Source of the Data

We’ve discussed the Freddie Mac mortgage rate survey before, and it can be a little misleading if you’re trying to get a live rate quote. However, when viewing the week by week trend in the numbers, you do get an accurate depiction of the market.

click here for a free, live rate quote 

Is it Worth Committing to a Faster Payoff?

Applications for shorter mortgages, such as the 15 year, are on the rise. With the quicker payback schedule of a 15 year mortgage comes a higher payment than with a 30 year mortgage. This is despite the 15 year’s relative discount in the rate. And because 15 year mortgage payments are higher, qualification for a new 15 year loan is actually more difficult than it is for a 30 year loan.

So it may be the case that in order to break the 3.00% mortgage barrier, you’ll need to take out a smaller loan. Is it worth it? Sometimes there’s more to it than just the rate on the loan. For each consumer evaluating this decision, a different set of unique variables will apply.

We can help. Click here to check rates on 15 year and 30 year loans

Why Today’s Case-Shiller Data don’t Jibe with the Recent Housing Market Buzz

'WWC Fall Family Fest' photo (c) 2005, Stevan Sheets - license: http://creativecommons.org/licenses/by/2.0/
Bay Area Housing Markets are bouncing.

Because it’s old data.

For the last two months, there have been a slew of market reports about a hard bounce in the Bay Area housing markets. Reports of multiple offers, homes gone pending practically before being listed, and selling for well over the asking price have been popping up here, and in other markets as well. San Francisco real estate: it’s “so hot right now“.

So when you read today’s headline about Case-Shiller coming in with “new post-crisis lows“, it can be rather confusing. Just when you’re about convinced that the market is getting better, Case-Shiller throws a big soggy wet blanket on the party.

You have to read carefully. Although the articles usually point it out, they identify the issue with Case-Shiller’s lag as just so matter-of-factly. Today’s report runs up through the end of March or Q1 2012. That means the news is already two months old. And it’s been about 2 months that the market has been going pre-bubble bananas.

So in short, you can wait a month or two to see what the next few reports have to say (last Tuesday of every month), or you can get caught up in the current buzz. May be a scary proposition after the last 5 years, but if you were looking to buy in say, Jenner, CA (population 136), then waiting has already been pretty costly. Year over Year prices up 218%.

Are you trying to get your game plan for buying a home together? start by getting a free live rate quote

 

 

How is Real Estate Like Hansel from Zoolander?

 

Bay Area Real Estate is hot
Bay Area Real Estate - so hot right now

A quick game of connect-the-dots will paint a picture of a Bay Area Real Estate market that is “so hot right now“. I guess anything positive feels hot relative to 4.5 years of a market that’s been deader than disco. But there has been a swift change in the mood of the market in the past several weeks – call it a couple months. It is time to pay attention.

From key housing market analysts calling the bottom, to anecdotal stories of home sellers receiving multiple offers, all of the sudden we’re partying like it’s nineteen-ninety-two-thousand-and-five. This is no longer the housing market of the Great Recession. Let’s take a stroll around the local web:

On BayAreaRealEstateTrends:
Oakland’s Jay Wiedwald takes a data dive into Oakland and Piedmont home sales, separating the activity above and below $500k. “The shock of the price crash is wearing off of both sellers and buyers”

On BlogByTheBay:
George Crowe introduces the “Absorption Rate” for Marin properties below $1 Million “The absorption rate for Marin homes under a million dollars was over 90% for March”

On BayAreaRealEstateTrends:
Greg Fielding provides an April snapshot for Real Estate along the 680 corridor, with inventory data by town. “The Market is on Fire”

On CalculatedRiskBlog:
A broader view based on national real estate data. “Inventory declines 21% year over year”

On Patch(Piedmont):
A smaller data set, but up 50%? This is not a starter home market, either. “Home sales in Piedmont during April were up 50 percent over March 2012”

It has Been Feeling Like a Market Bottom for a Few Months Now

I’ve been contemplating the idea of a market bottom for a few months. My last post here was all the way back during the end of NFL season, when I suggested taking a lesson from Tebow’s faith.

Shortly after, on one of my other writing posts, I recalled a 1980 essay from bond market magnate Bill Gross referred to as The Plankton Theory of Housing. It explores the health of the housing markets by looking at food chain dynamics, and whether it’s a good thing for the market when investors gobble up the low end inventory.

And, if you follow me on twitter, where I’m good for 5 links a day related to the Bay Area, Housing Markets, and/or Real Estate Finance, I’ve been pointing out every time a noted analyst has called the bottom. There has been a recent flurry of such calls, and many of this post’s links have been broadcast there already.

Time to Get Moving?

If you’ve been waiting for the bottom, and now you’re ready to jump into this market, it will help to start budgeting your monthly housing payment. Submit your info on the upper right to get a live rate quote.

When Is The Best Time To Buy Real Estate? Tebow Time

It’s Tebow Time for Real Estate

Before there was a real estate bubble, there was debate. 1,000 economists could look at the data on a given day and come up with 1,000 different projections for real estate. And they did. Still do.

There were a relatively few people audibly calling for a bubble to burst well before it happened, but they were out there. Like Tim Tebow on any given Sunday, they had faith, and stuck it out until they got their 15 minutes. And good for them. Everyone else was punch-drunk, and we’re still mopping up the aftermath of that mess like the it was the county fair after Davey Hogan was in a pie-eating contest.

Tebow is still riding his hot streak, but many of the people behind the early housing bubble voices also completely missed the ride up, or got out too early. Nobody nails the markets without a little luck. A broken clock is right two times a day, so it is said…

. . . chuck enough pigskins down the field, and some of them are gonna get caught . . .  Lucky streak? Or the real deal? This debate is not over…

Now, don’t get me wrong. I am a Tebow fan. This is a guy who draws hate for all the wrong reasons. And as his bottom-line-game-winner-respect grows, more and more sports fans are finding themselves wondering about belief, faith, and self-fulfilling prophesy. Watch the video below and see how a newbie quarterback stares down adversity with unwavering faith. It is a remarkable portrayal. There’s a lesson in there…

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When The Doubt Has Become Mindless, It Is Time To Believe

Housing: You are HERE
What mood is most representative of the real estate market today?

The bubble happened, and it scarred the homeowner psyche to a degree that is thus far unknown. It will undoubtedly take some time to heal, and in the meantime, a struggling housing market is just baked-in. It’s the accepted reality.

Maybe you can catch a deal while everyone else is snoozing.

This is a good time to remind ourselves about the Investor Emotion Cycle, shown at right. See if you can trace the line from left to right, and find the string of emotions that have characterized the real estate marketplace over the past 6 or 7 years. Where are we now?

Housing Bull Linkfest

There has been an increasing amount of chatter about 2012 being the year to buy real estate. Last week I said “This Is What The Housing Bottom Looks Like“.

I am not alone in this belief. Poke around some of the links below from recent articles citing the opportunity in real estate markets right now. I’ll be back in a minute to tie it all together.

Forbes: The Next Mortgage Crisis (aka, not having one)

Talbott (formerly of Goldman Sachs): Housing – Buy Now!

Wall Street Journal: It’s Time To Buy That House

Marketwatch: Now Might Be The Best Time Ever To Buy A House

JP Morgan: Housing- Time To Buy

Wall Street Journal: Big Money Builds Case For Housing

Yale’s Robert Shiller (tentatively) Suggests favorable long-term buying opportunity

HousingWire: Buying/Renting Costs Draw Closer

The Two Key Drivers Behind The Current Real Estate Buying Opportunity

The current swarm of real estate bulls are largely drawing from the “affordability index”, which combines the cost of real estate, the cost of real estate financing (mortgage rates), and income levels. Affordability is at the highest level it has seen since tracking began.

The other key detail driving this mood swing is the squeeze play happening with rents. Builders have slowed down considerably while banks have taken over vacant foreclosed properties, sucking inventory from the housing economy. A tidal wave of used-to-own renters have spiked rental demand at the same time.

Supply down + demand up = rising prices.

click here to get a free analysis of your rent vs own options

The Self-Fulfilling Prophecy In Real Estate

If enough people join the real estate faithful, the market will begin to reflect it. This is a self-fulfilling prophecy in the making; the same confluence of data causing a flurry of analysts to issue ‘buy real estate now’ articles will influence attitudes and behaviors. And behaviors will influence housing values.

Think for a moment about how markets ebb and flow. What causes them to reverse? At some point, they run out of gas. There is shift, and the attitude rolls over from ‘Despondency’ and ‘Depression’ just they do from ‘Thrill’ and ‘Euphoria’. Housing was a lofty market that fell. At some point, it just doesn’t look so bad to buy real estate anymore.

At some point, it looks downright attractive. Would you buy a house for $100? How much closer to free would it need to get before you were ready to dump your landlord? You have to explore the idea to it’s extreme to find a balanced answer.

At some point in the future, we will look back on this time and wish we bought real estate. Not just a home, but more home. A vacation home, an investment property. Multiple investments. It will happen again. Exactly when I am not sure. But real estate will find Tim Tebow’s faith again. And while the majority is still doubting it for all the wrong reasons, real estate will quietly become a winning bet before maybe drawing the eventual attention of the hysterical masses all over again.

It will happen when the Velocity of Money picks up, stimulus dollars of the past/present/future, bite down into the economy and get it humming again, and inflation comes flying around the corner harder than a Jon ‘Bones’ Jones spinning elbow strike.

The other side of this market is escalating rents or double-digit mortgage rates. Take your pick. Or lock it in right here at the historical bottom in rates, and the cyclical bottom in Real Estate. This is the sweet spot for buying real estate.

click here to get a free analysis of your rent vs own options

 

 

 

This Is What The Housing Bottom Looks Like

A big number popped out at me in this headline: Miami-Dade County Pending Home Sales Jump 25%

Pending Home Sales is a relatively new metric and is slightly different from the Existing Home Sales data. The key difference is that Pending sales have signed contracts, but the transactions have not yet closed.

So as a way of monitoring sales data, it’s a bit soft. But as a single data point, it is headline worthy – especially for the Miami market, which experienced one of the worst drubbings in the housing collapse over the past few years.

Real estate markets are very local. We cannot assume that what happens in Miami will happen to Bay Area housing at the same time. But there is no doubt that the general market has been a bubble in the process of bursting. Some hyper-local markets have been resilient, but for the most part this has been a national phenomenon.

The bottom cannot be identified until it has already happened. The period marked by uncertainty, conflicting data, wavering moods often signifies that we’re in the bottom.

For most markets, housing value free fall ended somewhere in the first half of 2009, as noted in the broad Case-Shiller index.

Case-Shiller chart on housing values
Recent Case-Shiller chart

Since then there has been a steady run of reports, specific to housing, and on the broader economy, that fuel the debate about what’s next for housing:

  • double dip / 2nd down leg
  • slow grind lower
  • stagnate
  • bounce back somewhat

The mood has wavered with the data. The index has also seesawed with the steady drip of economic reports. The debate will continue to rage onward in 2012, but we’re starting to see more and more comments and data in favor of housing going forward.

Check out the rent vs. own math for your own scenario for free

The Housing Markets Hit the Hardest Have The Most To Re-gain

There was a bubble, and then there were some out of control markets. Fringe development areas built on the promise of new community infrastructure are not likely to have a quick value bounce. But metropolitan areas, with nearby access to jobs, schools, existing communities will become desirable markets again.

Once overbuilt markets like Miami will, in recovery, catch the attention of other areas, and influence the mood just as they did on the way down.

It will be important to find other data points trending in the same direction, or showing the same sentiment as confirmation that this is a meaningful reference. There are a lot of tentative buyers on the sidelines waiting to confirm the market has bottomed. Recovery may be gradual, but could have quick lurches forward as the sentiment can shift quickly.

Check out the rent vs. own math for your own scenario for free

More Chatter on Reinstating High Balance Conforming Loan Limits to $729,750

San Francisco real estate
San Francisco and other Bay Area counties would "light up" with joy if conforming loan limits were raised back to $729,750 photo: Andreas Gronski

Allowing the conforming loan limits to roll back from 729,750 to 625,500 (max determined by county) did nothing to help the Bay Area Real Estate market in the short run. We reacted to the official studies and reviewed the impact zone a few months ago.

It wasn’t proactively lowered; it was a temporary expansion that came during stimulus efforts, and which was allowed to expire. Since the change, there have been a number of efforts to get the limits raised back up through 2013. Congress is currently fighting over discussing it once again, and the verdict is due any day.

In the meantime, the once frigid jumbo market has seen improved conditions, as evidenced by generally expanding product availability and loosening guidelines. So if the conforming limit is not bumped back up, borrowers who are ‘jumbo’ with 625,501 and larger loan scenarios may find that the guidelines have now included them once again.

Might be time to review your situation… Drop a note below, and let’s take a look.

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    How HARP Phase II (aka HARP 2.0) Will Help

    The revamped HARP program was announced on Monday as expected. Some of the expected changes from the original HARP program were met, others were not.

    The new key features include:

    • No maximum Loan To Value. Theoretically, you could owe 400k on a property valued at 40k and you could be eligible.
    • Elimination of Reps and Warranties which lowers risks for participating lenders
    Features that don’t help:
    • Lower adverse pricing adjustments for shorter term loans – incentive to refinance into a 15 year term
    • Loan must date back to May 2009 or earlier, HARP remains a one-time use program
    Some of the reasons why HARP failed to live up to expectations are being addressed here. LTV was a big one. Even though the program allowed LTV up to 125%, loans above 105% were scarcely provided by lenders. Quite often, it required the “same servicing lender” to originate the HARP loan, which was a problem when a majority of servicing lenders had quit originating loans entirely in the wake of the Mortgage Meltdown.

    The Reps and Warranties issue should also help lenders jump in to participate in this program. Program guidelines can be laid out with the government’s design, but that doesn’t force (theoretically) free market participants (banks) to participate. They’ll do it if they believe they can make money with it.

    Estimates are floating around that speculate anywhere from 1.9 Million to 3.9 Million homeowners could benefit from HARP II. It will help.

    Lender program details will begin to emerge in mid-November. In the meantime, the majority of homeowners are unaware of whether they have Fannie Mae or Freddie Mac loans; do the research now.

    Make sure you enter the information exactly as it reads on your mortgage statement. The forms are sensitive to “St.” vs “Street” etc. If your loan is backed by either one, make note of it. If you’d like me to contact you when more details emerge, fill in a few details in the form below.

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      Can I Refinance my Mortgage if I’m Underwater and I’ve Never been Late on a Payment?

      These days, no single question comes up more frequently than this. An “underwater” home is one where the outstanding mortgage debt exceeds the appraised value of the real estate. Being underwater is a common situation 4 years into the mortgage meltdown. On average, the cities of Las Vegas and Orlando are underwater.

      An announcement is expected today about a revamped refinancing plan that would open mortgage refinancing access to an estimated 3 to 4 million underwater homeowners.

      As the Great Recession wages on, rates have hit historical lows. But the refinance party has been an exclusive one; a huge segment of American homeowners are unqualified to re-borrow the debt they already have because of the loss in value of their homes – even when doing so would bring tremendous savings, thus putting them in a safer, more affordable situation. It’s quite a common trap.

      There have several stimulus package programs aimed at helping struggling homeowners over the past 4 years. Too many to keep track of. Actually, I take that back. At Propublica, they have been keeping track of not only the various programs, but also the impact each has had. This list is all Obama-era, and lest you think I’m subtly criticizing the our fearless leader here, there were failed efforts under Bush as well, such as: Hope For Homeowners.

      Home Affordable Refinance Plan 2.0?

      Of all the plans enacted thus far, Home Affordable Refinance Plan (HARP) has been the most impactful. The HARP program reached in to the underwater sector making any borrower who has a Freddie Mac or Fannie Mae insured loan eligible up to 125% of their home’s value.

      In their model, underwater homeowners could benefit from a program that opens access to refinancing for borrowers who are current on their mortgages, but unable to access current rates due to equity or income qualification hurdles.

      HARP was estimated to open up refinancing options for 3 to 4 million homeowners. Since it emerged in early 2009, a little more than 800k people have successfully refinanced under HARP. The plan has largely been considered a disappointment, but it has penetrated the distressed homeowner market further than any other plan. In recent weeks, speculation has been building about a renewed effort with HARP that would address some of the reasons why it has not been more effective.

      Likely HARP Plan Tweaks

      recent study from the Congressional Budget Office speculated about the costs and benefits of revising HARP. The revamped plan is expected to carry some or all of the following adjustments:

      • remove the Loan-to-Value caps (presently at 125%)
      • reduce if not remove the loan pricing adjustments that currently make high LTV HARP loans carry a substantial rate premium relative to the broader market
      • soften or eliminate income underwriting guidelines
      • eliminate appraisals
      • allow repeat HARP transactions, as opposed to one-time access
      The basis for eligibility gets reduced to:
      • Freddie Mac or Fannie Mae insured loan
      • Current on payments
      At this point, if you’re deep underwater, and still making the payments, have you not essentially made the case that A) you have the ability to pay your mortgage and B) you are willing to pay your mortgage?

      The tenets of mortgage underwriting are all based on evaluating willingness and ability to repay the debt. How much more simple could it be? Plus, if underwarter homeowners were able to access rates in the low 4% range, it stands to reason they’d be much less inclined to let go of that home. When you’re stuck at 6.5% or you have a rate that is adjusting and you fear the future increases, then you have the makings of a strategic defaulter.

      Allowing refinancing based on payment history is an extreme concept in this underwriting environment, but it is a back door solution to address a massive amount of negative momentum that continues to poison the housing market.  If it works.

      There are still several reasons why it may continue to be a headline that sounds a lot better than the story itself. This plan will be full of criticism, critique, and cries. There are unintended side-effects in the making. The philosophical debate between proponents of free markets and of government intervention will be full of sparks. And with an election season approaching, the political pandering and soapbox superhero nonsense will be enough to make my skin crawl.

      But, if this program unlocks refinancing for the millions of homeowners who have been boxed out of the market for the past few years, there will be widespread stimulus in the form of $100, $200, $300, even $500 per month in savings. It will be well worth paying attention to.

      What do I do Next?

      I can help you find out if your loan is backed by Fannie Mae or Freddie Mac. Contact me if you’d like me to check into it for you, and to help you figure out if the new HARP program will be able to help.

       

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        Today’s News About Yesterday’s Record Low Mortgage Rates

        'Yesterday's papers telling yesterday's news' photo (c) 2010, Tim Green - license: http://creativecommons.org/licenses/by/2.0/A few months back we looked into the accuracy of the Freddie Mac Primary Mortgage Market Survey. The basic bottom line is that you can get a general feel for the trend over a couple weeks or longer, but for up to date mortgage pricing, it’s worthless. Even when accurate, it’s only by coincidence.

        Here’s Why Mortgage Rate News Is Usually Wrong

        The Primary Mortgage Market Survey comes out every week, on Thursday morning. The sampling of data takes place between Monday and Wednesday of the same week. The number they give is an average of all transactions in the survey, and identifies both levers in the mortgage pricing equation: rate and points.

        There are three primary pitfalls for consumers when reading this news – and the weekly survey does get quite a few news mentions; it is undoubtedly the most widely quoted and referenced data on mortgage rate activity in the financial press. Here’s a look at each of the pitfalls:

          1. The average rate is a blend of what rate the loans have been written at during the survey period. It is not the average “zero points” or “par” rate. Some people opt to pay points, others do not. This survey captures what is happening on average, with regard to rate AND points. The headline references the average rate, the fine print includes the points. In the most recent press release, the first paragraph reads as follows:

            “MCLEAN, Va., Sept. 29, 2011 /PRNewswire/ — Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey®  (PMMS®), coming on the heels of the Federal Reserve’s recent announcements. The conventional 30-year fixed averaged an all-time record low at 4.01 percent; likewise the 15-year fixed averaged an all-time record low at 3.28 percent for the week. Of the five regions surveyed in Freddie Mac’s survey, the West region recorded the lowest average rate for the 30-year fixed dipping below 4.00 percent to 3.95 percent.”

            You have to read further, or click through to the website to find out that the average rate also came with an average cost of 0.7 points. That’s an important variable. Most consumers shop for “zero points” or “no cost” mortgages, so the relative obfuscation of the average points paid will mislead the consumer.

          2. The report is not real-time. Sampling takes place between Monday and Wednesday, and results are compiled and released early Thursday. Thursday’s market may in fact be miles away from Monday-Wednesday.

            Last week, on Wednesday, the Federal Reserve announced Operation Twist and sent the bond market into a panic rally. Mortgage rates hit their absolute lowest levels on record the following day (Thursday). The survey for that week picked up some data from Wednesday, which helped, and announced “lower rates”. But it completely missed the point that on that very day the rates were hitting even lower levels.

          3. The report focuses on a narrow borrower profile segment.  To be fair, narrow in this case is common. But it is in no way comprehensive. To be included in the survey, the data must pertain to loans that are:

        -borrowing $417,000 and below
        -single family residence (no condos, duplexes, etc)
        -owner occupied residence

        The bottom line is that there’s just no way to know if the headline is a day late or a day early. If you’re looking to refinance a condo, an investment property, or a jumbo loan – or, if rates are generally volatile during this period – or, you’re looking for a no cost refinance, the survey isn’t going to give you a clear answer. It will literally be giving you yesterday’s news. Depending on the direction of the markets, this can mislead you for better or worse. It just depends.

        In fairness, it’s a pretty good report when looking at longer term trends. Especially as it highlights the average fee component, and shows if people are leaning into or away from paying points for below par mortgage rates. But if you need a quote specific to your case, there’s no better way than to keep in touch with your lender. Set a target, know what’s coming on the economic calendar, and devise a lock strategy with your lender.

        Need help with a plan? Fill out the form below and let’s have a quick conversation.

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