Mortgage Rates Now Close to 7.5%
Mortgage News Daily reports that 30-year fixed mortgage rates are now close to 7.5% (7.45% daily index), significantly higher than Freddie Mac's weekly survey of 7.03%. The article explains the discrepancy in reporting methodologies and attributes the rise to inflation, Fed rate hikes, higher oil prices, and strong economic data.
Why it matters
Rising mortgage rates directly impact housing affordability and the broader real estate market, affecting potential homebuyers and the overall economy. This trend could slow down housing transactions and increase borrowing costs for consumers.
More than a few media outlets will tell you that 30yr fixed mortgage rates are just now moving over 7% based on the fact that Freddie Mac's weekly rate survey hit 7.03%, up from 6.95% last week.
Before continuing, let's be clear that Freddie's weekly rates are a valuable resource for long-term, big picture analysis. But the survey is not an ideal tool to keep track of where rates are on any given day. There are a few reasons for this, but the easiest to understand is that today's update from Freddie is calculated from an average of rates seen between last Wednesday and yesterday. In other words, it hasn't even measured what rates did today, not to mention the fact that the number is artificially dragged down by lower rates earlier on in the 5-day cycle.
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