Mortgage Rates Are Lower Than Freddie Mac Is Reporting

Freddie Mac reports the 30-year fixed mortgage at 4.09% this week. Freddie Mac is wrong.

Freddie Mac Missed The Rate Dip

Each week, Freddie Mac releases its Primary Mortgage Market Survey, a list of average mortgage rates for popular loan products, gathered from more than 125 banks nationwide.

The survey is a big deal. Not only is it among the most widely-cited mortgage rate surveys in the country, but it’s the “mortgage rate basis” for things like Home Affordability studies, congressional reports, and just about anything else mortgage rate-related.

This week, Freddie Mac showed the following mortgage rates:

• Average 30-year fixed rate mortgage : 4.09% with 0.7 points
• Average 15-year fixed rate mortgage : 3.29% with 0.6 points
• Average 5-year adjustable rate mortgage : 3.02% with 0.6 points

Unfortunately, these rates are “wrong”. Mortgage rates are lower than what Freddie Mac reported. Loan with discount points have dropped by close to 0.250 percent.

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You Won’t Believe How Far Rates Fell

When Freddie Mac does its survey, it polls its banks early in the week, with a deadline of Wednesday mid-day. The Wednesday deadline is so Freddie Mac has time to compile its replies, and publish its results.

However, most banks don’t wait until Wednesday to send in their surveys. They reply at the first chance they get — Monday.

Now, in most weeks, this doesn’t matter; mortgage markets are fairly tame. This week, though, it did.

See, on Tuesday, after many banks had already reported to Freddie Mac, the Greek Sovereign Debt story picked up steam again, driving a flight-to-quality that dragged down mortgage rates. And then, Wednesday, that momentum continued all the way up to the Federal Open Market Committee’s afternoon adjournment.

Mortgage rates were already lower by 0.125%, on average, at this point.

Then, when the Fed launched “The Twist” — a market stimulus package in which the Fed sells short-term securities, and exchanges them for an equal number of long-term ones — rates fell another 0.125%. And all of this happened after the Freddie Mac survey had been “closed” for the week.

Freddie Mac says rates were unchanged this week. That’s completely false.

Next Week’s Looming “Mortgage Rate Rush”

Mortgage rates are low right now yet nobody knows it. Net week, they will. And when they do, the floodgates will open and mortgage refis will boom. Your goal is to get ahead of that rush. You’ll get better rates and faster service.

Don’t wait for the papers to tell you what you already know. Mortgage rates are down.

Click here to get a rate quote.