Mortgage Rates Forecasts Differ By Location, Terms, And Borrower

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October 13, 2016

There’s too much context in the mortgage industry for trends and news to be summed up in a pithy headline.

Jonathan Smoke, the chief economist of Realtor.com, writes that news reports about mortgage rates are often inaccurate. Rates do not move glacially and are not the same for everybody; they vary by borrower, location, and loan product and term.

For instance, last week Freddie Mac released a report titled “Mortgage Rates Largely Unchanged.” The survey average for the 30-year conforming rate was 3.42 percent, which matched the previous week.

But this weekly view gives you the false impression that rates are stable and have been all summer and fall. In reality, rates have been fairly volatile. By my calculations of daily averages of lender rate offers, mortgage rates have moved an average of 5 basis points within each week since the last week in June. Five basis points affects a monthly payment amount by 0.6%, so this is anything but calm.

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