Latest News on Mortgage Rates
Mortgage Rates Are Basically Back to 9-Month Highs
For all intents and purposes, the average 30yr fixed mortgage rates at the average lender is as high as it’s been since November 2022. The mortgage rates itself as far as we see it is 7.10 which means most lenders are quoting 7.125% after adjusting for discount points (or just “points” for short).
For example, a borrower could opt to pay in terms of mortgage rates just over 1% of the loan balance upfront in order to drop the rate to 6.625%. Some lenders are quoting 6.625% with that extra upfront cost. Others are quoting mortgage rates of 7.125% without the extra cost.
The upward momentum in mortgage rates didn’t draw on any specific news or developments today. Rather, markets are bracing for impact from upcoming economic data as well as tomorrow’s announcement of the latest borrowing amounts from the US Treasury.
Treasury issuance matters because Treasuries are one of the most important determining factors for interest rates affecting mortgage rates in the U.S. The more that are issued, the lower the price and the higher the yield/rate. Analysts know the amounts will be going up and markets are nervous and uncertain about the amount of the increase.
Most important point: the best use of this index is to track the CHANGE from day to day. There are so many things that can cause discrepancies between borrowers, lenders, and quotes. But because we use the same baseline scenario year after year, you can be sure that the CHANGE is a good representation of how rates are moving.
The source data is actual rate offerings from a variety of lenders including wholesale, correspondent, and retail.
The index is generally updated once per day unless multiple lenders have changed rates during the day.
A “top tier” scenario is used as a baseline (75LTV, 760FICO, etc).
We use proprietary methodology to adjust the rate to account for points. That can mean that lenders are quoting 6.125 with points while our index is at 6.25, hypothetically.
We generally disregard the “loss leader” mentality among certain lenders (i.e. quotes of 5.5% in the marketplace have little to no effect on the index if the average lender is at 6.25%). Conversely, we also disregard lenders who are obviously out of the market on the high side.