Mortgage Rates Are Near 2-Month Highs

Mortgage Rates may have managed to hold steady to slightly lower, but it's important to understand that today's rates are still significantly higher than Tuesday's. In fact, there have only been two days with higher rates in the past two months and yesterday was one of them.

This assessment runs counter to today's weekly Primary Mortgage Market Survey from Freddie Mac, which characterized rates as being lower this week. This can happen because of the fact that Freddie accepts weekly survey responses from Monday through Wednesday and receives most of those responses earlier in that time window. That means that if rates jump significantly on Wednesday or Thursday that Freddie's average 30yr rate can move in the opposite direction of the true week-over-week change in mortgage rates, as is the case today.

What does "significantly" mean? In statistics In this context, a move of .125% is significant because it's highly uncommon for lenders' rate sheets to change by a full eighth of a percentage point in rate from one day to the next. That's what we saw yesterday, and it was indeed significant for anyone currently in the mortgage market. A jump from 4.25% to 4.375% may look fairly tame on your computer screen, but when it would cost the average borrower several thousand dollars to get back to the previous day's rate quote, it's significant, not to mention the fact that it's infrequency makes it statistically significant as well.

The pain eased somewhat today. Although the most prevalently quoted conforming 30yr fixed rate for ideal scenarios is now easily back up to 4.375%, the borrowing costs associated with that rate are slightly lower than they were yesterday. Several lenders recalled rate sheets an improved pricing during the day.

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