6% Mortgage Rates Are Old News
Internet, television, and even public radio stations were buzzing all day with ground-breaking news about mortgage rates. Apparently, for the first time in 14 years, 30-year fixed interest rates have fallen above 6%. Big news, isn’t it?!
Maybe not. Here are two titles from the recent past:
(September 1) Mortgage rates jump above 6%; More volatility to come
(June 13) Mortgage rates are up well into the 6% range after one of the worst days in decades
After the initial break above 6% in June, rates were able to recover very well by the end of July. But since then, they’ve been on the rise. In addition to spending nearly the entire month of September above 6%, today’s rates, specifically, hit a new high in 14 years.
So why is the big news suddenly becoming that prices are over 6%?
It’s all about the source of the news item. Today’s uproar is due to the fact that Freddie Mac’s weekly interest rate survey finally reached 6%. While this survey data is often outdated and sometimes misleading, it is nonetheless the Mortgage Industry Corporation (according to Freddie’s credit, they recently announced that they would be working on a review of their methodology to address these drawbacks. Hopefully they can solve them!). Simply put, it is heavily relied upon by almost every major news organization to cover only that week’s custom mortgage rates.
The following chart shows how actual daily rates are affected over time versus Freddy’s and MBA’s rates. Daily rates are usually higher at times when “points” are involved in locking in the best rates because daily rates are adjusted for points (allowing apples to apples to be compared with any other point in the past).