Rates Drop!
Last Thursday morning, homeowners in different parts of the country woke up to find the following headlines in their newspapers:
- Rates on 30 year mortgages sink to 4.78%, a new low (LA Times)
- Mortgage rates at record low for a 2nd week (Miami Herald)
- Mortgages hit another record low (San Francisco)
The driver of this story was that Freddie Mac’s weekly Primary Mortgage Market Survey showed the lowest, average 30-year fixed rate mortgage in its 38-year, rate-tracking history. Yes, this is good news.
That’s Old News
However, once again, the headlines came too late for homeowners.
Prior to Thursday’s market open, mortgage markets had already worsened from their record-setting levels. The worsening started slowly at first, and then sped up. The shift pressured rates higher so that when lenders issued their Thursday morning rate sheets, most showed an 1/8 increase from Wednesday’s close.
Even worse, the negative momentum carried into the afternoon, forcing a second increase of an 1/8 percent. A 3 rate sheet day, but that shouldn’t surprise you.
The Freddie Mac survey may have been accurate when the sun came up on Thursday. However, by the time the sun went down, it wasn’t even close. It is another example of why you can’t do your rate shopping by watching newspaper headlines. Mortgage markets are volatile and rates often change without notice.
Thursday, they did it twice.
