Mortgage Rate Price Tracker 🏠📉🔍 (FEB 2 – 27)
Monitoring the change in price of specific mortgage rates
Included in this post are the following:
THE TRACKER 🔭
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Most mortgages are sold into mortgage-backed securities (MBS) and the price of these bonds determines rates for all banks and lenders.
However, mortgage rates DO NOT rise or fall. Instead, the price of each rate changes while the rates available to you remain the same.
The Mortgage Rate Price Tracker (MRPT) illustrates this dynamic by showing how the price of each rate changed within the time series.
The higher the rate, the lower the fee (points). Some higher rates pay a rebate; this is illustrated on the tracker with negative (-) points.
When the “total change” is negative it means a reduction in the price of the rate.
The MRPT is a “rate and loan program” specific example of the LendZen Index, which monitors a much broader set of rates and mortgage bond coupons.
Both are effective for visualizing how the PRICE of mortgage rates has changed, while the LendZen Index is published daily at LendZen.substack.com
WEEK 4 📉
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Since the LendZen Index has a variety of time series, the MRPT will focus on just the current month’s activity.
Attached are the results for February Week 4.
The rates in the VA 30 tracker now include 4.75%.
You can also explore the results for Week 3 on this previous Substack post.
OBSERVATION:
Big moves for mortgage rate prices for the short month of February, with both Conventional and VA Loans showing improvement of over 100-bps in price.
RATE RECAP ⏪
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Last week there were no surprises from manufacturing data, including the Producer Price Index which gave us a mixed inflation outlook.
Tuesday’s Shiller Home Price Index also satisfied expectations, reporting a 1.27% annual increase for December; the Shiller Index reports on a two-month lag.
After an uneventful week, the stage was open for a more captivating act and mortgage rates decided to steal the show.
On Friday Freddie Mac published their weekly “Primary Mortgage Market Survey”.
Not usually a headline grabber, but the 5.98% print is the first time their 30-Year Fixed rate average came in below six percent since 2022.
The Wall St. Journal thought it was frontpage worthy, and that’s all it took for every real estate agent in the country to repost it. 🙄
But here is the punchline… the PMMS isn’t a survey anymore.
Instead, they only use initial application data when a file is first submitted through their underwriting system; it’s not even final loan data.
Plus, no collection of any points or fee data, which is the only thing that actually matters.
Freddie Mac is just averaging a bunch of random rates at the initial submission, without any context as to what the borrower is paying for that rate.
They don’t hide this either and tell you upfront their data is unreliable, but no one bothers to look … I did.
Regardless of how mortgage rates grabbed the spotlight, the attention is welcomed.
Especially considering the month we just had, with rates in the lower tiers improving over 100 basis points in price.
Meanwhile, the broader set of rates used in the LendZen Index show over 340 basis points of price improvement in the last 180 trading days.
Insight into this week’s events, including the latest Rate Impact Calendar, will be posted later today in the Week Ahead.
With the attack on Iran, dubbed Operation Epic Fury, entering its third day the outlook for the week will be framed more by how markets respond then the already scheduled data.
Meanwhile, check out this popular post explaining how to find the best deal when shopping for a mortgage.
Thanks for reading.
If you want to shop real-time mortgage rates and get instant qualification results without providing any contact information visit LendZen.com
LendZen provides a fully automated mortgage shopping experience that gives you anonymous access to all mortgage rates with full transparency of costs upfront as bond prices change.
You can also request an official Loan Estimate for the exact loan you created and save your scenario to revisit your rate options daily with one-click.
See for yourself and experience hassle-free mortgage shopping at LendZen.com
DISCLOSURES
LendZen Inc. is an equal opportunity mortgage lender, NMLS 375788.
