How to Make Sense of Mortgage Rate Info These Days

By: Matthew Graham •

Let's start today's rate coverage with a public service announcement on the best way to be a consumer of mortgage rate data online. 

It can be quite a chore to make sense of day-to-day mortgage rate movement recently.  Even after doing as much as can possibly be done to ensure apples-to-apples comparisons, there can still be significant changes and discrepancies for one of any number of the following reasons:

  • You're looking at rate info that is more than a few hours old (even worse if you replace "hours" with "days").
  • You're looking at rate info from one specific lender and comparing it to a broad average or a different lender
  • You're looking at a rate quote that relies on upfront points in order to secure a lower rate
  • You're looking at a rate quote for a scenario that involves LLPAs (loan-level price adjustments) imposed by regulators based on certain loan characteristics

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

 See Rates from Lenders in Your Area

Forget the rate itself and focus on the day to day movement.  In other words, our top tier 30yr fixed index suggests that lenders are quoting 6.625% today on perfect loans with no price adjustments.  Someone with a more average scenario could easily be seeing 7%+.  Lenders who compete for web leads with "fine print" conditions could be more than a percent lower. But any scenario at any lender is infinitely more likely to MOVE like another scenario at another lender.

Shifting gears to today's MOVEMENT (since that what matters after all), rates are HIGHER today than they were on Friday.  Most lenders ended up raising rates during the business day in response to bond market losses. In terms of 30yr fixed rates, the average lender ended up about an eighth of a percent (.125) higher compared to Friday morning.