It's Thursday and thus time, once again, for the weekly mortgage rate survey from Freddie Mac. Over time and in the bigger picture, Freddie's survey is an accurate way to track broad trends in rates. But because it primarily captures market movement that occurs in the first 2 days of any given week, and because that movement isn't reported until Thursday, the numbers can lag up-the-minute reality.
For those interested in up-to-the-minute reality, there's good news about mortgage rates today. Freddie's survey shows a decline of 0.12%. That's an uncommonly big week-over-week drop. Accordingly, many major news outlets are reporting the 0.12% drop. The good news is that rates improved so much today (a day not counted in Freddie's numbers) that, if nothing changed by next week, Freddie's survey number would drop by nearly 0.12% AGAIN.
By my tally (which incorporates real-time changes in actual lender rate sheets), the average effective rate is down 0.26% from last Tuesday and 0.20% from last Wednesday. Today, alone, brought a decline of 0.10%, making it the best day since Brexit in late June in terms of day-over-day movement. A majority of lenders are back to quoting 4.125% on top tier conventional 30yr fixed scenarios. A few are already back down to 4.0%. These quotes are the lowest in more than a month.
Yesterday I said that 2017 was shaping up to be less threatening, but that we hadn't yet seen solid cause for celebration. Today is that cause. There are a few ways to celebrate. On the conservative side, you could count your blessings, given the fact that lenders have been rational and fair in terms of adjusting rate sheets lower to match market improvements. On the aggressive side, you could take today's gains as a sign of underlying strength in bond markets and "let it ride." If you choose the aggressive option, just be sure to set a "stop-loss" level at a higher rate than today's, where you'll lock to avoid further losses. To be sure, there is NOT a great chance of rates returning to pre-election levels any time soon. The only question is how close they will get before hitting a wall.
