For some lenders, it was last week. For others, it was today. After months of waiting and multiple successive reports of all-time lows from other sources, the average lender is now finally back in line with the actual all-time lows seen on August 4th, 2020.
If I’m telling you that, and other sources have told you other things, how do you know who’s right? Actually, everyone’s right, as long as you understand the limitations and implications of their respective methodology. I went into significant detail on that a few weeks back (click here to read the piece in question) but the key difference is that my mortgage rate tracking adjusts daily–sometimes several times a day–so it was better able to capture the ultra low rates on August whereas it was lost in the averaging methodologies of other data aggregators.
The other consideration is that I weight my rate tracking according to refi demand, and refis got noticeably more expensive with the roll-out of the new refi fee–something that happened briefly in mid-August, but then began in earnest in mid-September (even if you read articles that suggest the fee could have been avoided as recently as Nov 30th, they’re wrong, and I’m right… I super duper promise).
So did anything new and different happen today to cause a drop in rates?
No, not even a little bit. If anything, it would be more accurate to label today’s rates as ‘unchanged‘ versus yesterday. And in general, they haven’t changed much all month. That’s impressive considering the rest of the bond market has undergone a normal amount of volatility. It’s also a testament to the uncommon set of considerations facing rates at the moment. Bottom line: they’re still much higher than the bond market says they need to be because lenders can’t handle the business that would come in the door if they dropped rates any faster.
As long as that continues to be the case (i.e. as long as the bond market doesn’t panic too much), mortgages can continue to defy their traditional benchmarks and hold steady. If the broader bond market happens to do any better than “panic,” mortgage rates could easily continue trickling lower, albeit at a pace that is too slow for the average homeowner to sit around and wait for.
In other words, you’re not likely to miss out on some epic improvement by pulling the trigger now vs later.