Weekly Mortgage Average vs. Daily Rates

This week, one headline said mortgage rates fell for a fourth straight week, and another said bond yields jumped. Both were true, because Freddie Mac’s weekly average and the day’s bond market measure different things over different days.

This week in the market

Freddie Mac’s national average for a 30-year fixed-rate mortgage was 7.11% in its November 12 survey, down from 7.18% a week earlier. The 15-year average was 6.45%, down from 6.57%. Those are national averages, not an offer and not our rates.

Over the same stretch, the 10-year Treasury yield closed at 5.10% on November 12, up from 4.84% on November 5, according to the Treasury Department. Employers added 165,000 jobs in October, and consumer prices rose 0.4% in October on a seasonally adjusted basis, according to the Bureau of Labor Statistics. Mortgage rates tend to move with the 10-year yield.

How the weekly average is built

Freddie Mac’s Primary Mortgage Market Survey is not a poll of lenders taken on Thursday morning. It is drawn from thousands of loan applications submitted to Freddie Mac through its Loan Product Advisor system.

Each weekly figure covers applications from 12:00 a.m. Eastern time on the prior Thursday through 11:59 p.m. Eastern time on Wednesday. The result is published Thursday at noon Eastern. So the November 12 figure reflects rates on applications from November 5 through November 11, and nothing that happened on November 12 itself.

The survey also has a narrow profile. It covers conventional purchase loans within the conforming loan limits, on one-unit single-family homes the buyer will live in, for borrowers with good to excellent credit. It does not include points, because lenders are not always required to report them.

Why the two can point in opposite directions

Lenders reprice their rate sheets as the bond market moves, sometimes more than once a day. The weekly average catches those moves only after the fact, spread across seven days of applications.

This week shows how that plays out. The 10-year Treasury yield rose a little after the October jobs report, then more after the October inflation report on November 10. The Treasury published no yields for November 11, Veterans Day. The largest one-day move in the month so far came on November 12, the day the survey was published and one day after its window closed.

So a reader on Thursday could see a weekly average that had eased, alongside a 10-year yield at its highest close of the month so far. The average described the week that had just ended. The bond market described that day.

The reverse happens too. When yields fall late in a survey week or on a Thursday, the weekly average can show a rise or a small change while the day’s rate sheets have already improved.

What each number is good for

The weekly average is useful for the trend. Because it is built the same way each week from a large number of applications, it shows how rates have moved over months and years. Our rates page charts it for that reason.

The daily yields are useful for what lenders are reacting to now. The 10-year Treasury yield and the price of mortgage-backed securities move through the trading day, and rate sheets tend to follow them.

Neither number is the rate any one borrower is offered. That rate depends on the loan type, credit score, down payment, loan amount, property type, how long the rate is held, and whether points or credits are part of the price.

What it means in Southwest Colorado

National headlines reach Mancos, Cortez, Durango and Pagosa Springs the same way they reach everyone else, and they can sound like they contradict each other in the same week. Many loans here also fall outside the survey’s profile: FHA, VA and USDA loans, jumbo loans, second homes and rentals, and borrowers whose credit or down payment differs from the survey’s. Each of those prices on its own terms.

That is part of why we shop mortgage lenders for you on the day a price matters, rather than starting from a weekly average. Your Mortgage Plan shows the options that fit your file side by side, and we go through the figures with you when your Loan Estimate arrives from the lender. The weekly market read on our rates page is there to explain the backdrop, not to set a price.

Facts, not forecasts. Rates move every day, both ways. National averages are attributed to their source and are not our rates or an offer.

Why the weekly mortgage average and daily rates can disagree