Thursdays are special days for mortgage rate aficionados–or they can be anyway. That’s when the weekly mortgage rate survey from Freddie Mac is released.
The survey is a mainstay of the mortgage industry and the news media. It’s been around the longest and is really the only mortgage rate benchmark the industry has. That’s TERRIFYING considering how hopelessly inaccurate it can be at times.
In Freddie’s defense, they are upfront about their methodology, which is the biggest part of the problem. They send the survey out on Monday and then accept responses until Wednesday. Based on my research comparing actual rates with Freddie’s survey over the years, a vast majority of the responses come in on Monday and Tuesday. As such, this weekly rate survey is better described as a “Monday mortgage rate survey.”
Unfortunately, the survey is released on Thursday, at which point news outlets do things like this: “Mortgage rates fall to record lows for the 11th time this year.” Not their fault really. After all, who are they to question the mighty Freddie Mac–a mortgage market authority?!
Even more unfortunate is a day like today where rates are unequivocally higher across the board versus last week–not by much, mind you. For the first time in a long time, I really have no logical way to reconcile rate sheet reality with Freddie’s survey. All I can do is convey that reality: rates have been generally flat to slightly higher in recent weeks and as of yesterday, were at the highest levels in nearly a month. Today’s rates were actually slightly better for the average lender, but not by enough that any consumer would notice it on a mortgage rate quote (and not by nearly enough to claim that this week’s rates are lower than last week’s–even then, Thursdays aren’t counted in the survey anyway).