Mortgage rates can seemingly do no wrong this week. They fell again today–this time making it firmly into territory not seen since late April. At current levels, many lenders have moved on to quoting conventional 30yr mortgage rates well below what I was able to give most of my past clients.
Today’s improvements, and indeed some of the improvements earlier this week have NOT been captured by Freddie Mac’s weekly Primary Mortgage Market Survey–the industry standard for mortgage rate tracking. While the survey is highly accurate over the long haul, its methodology doesn’t allow it to capture all of the movement in any given week. In fact, the only rate sheets that inform the survey response are those that come out on Friday afternoon through Wednesday morning. Moreover, the survey responses tend to arrive more toward the beginning of the week. That means if things are moving fairly quickly over the course of the week, Freddie’s survey will be a bit behind the curve.
There’s nothing good or bad about the lag in the Freddie Mac data. It’s a valuable resource that just happens to be a bit too ‘wide-angle’ for the average borrower or originator seeking the most up-to-date information on rates. I only bring it up because almost every major news outlet relies on the Freddie report for its official weekly article on mortgage rates. Today, those articles will be saying there hasn’t been much of an improvement over last week, and it’s important you know that’s no longer the case.
This is a timely piece of information as well, because tomorrow brings the important Employment Situationreport (aka “jobs report, nonfarm payrolls, or NFP”). This is the biggest piece of economic data that comes out each month and it has the greatest potential to cause movement in the bond markets that dictate mortgage rates. With rates at 5-month lows and even a 50% risk of a big bounce higher, it’s even harder to make a caseagainst locking today. Granted, risk-takers could be rewarded if the report is exceptionally weak, but even then, we have to consider that rates can sometimes bounce higher simply because they’ve gotten tired of moving consistently lower. We’re not quite to the point where that’s an imminent risk regardless of the data, but certainly, an equivocal jobs report wouldn’t make any strong arguments for rates to continue lower.