Weekly Real Estate Monitor for Oct. 7-11

It can be overwhelming to pin down exactly what the mortgage rate is at any given moment as there isn't one universal "going rate" for mortgages. Instead, rates form a bell curve, with most lenders clustered around the middle and a few outliers at the edges. This week's rates showed a slight increase, starting?the week at 6.62% and at 6.64% as we approach the end of day.

The closest thing to a constant across multiple lenders is the bond market. Specifically, mortgage-backed securities (MBS) prices influence the value of loans that mortgage lenders offer. However, lenders have a variety of factors they control that affect the rates they can provide at any given MBS price level.

Getting a specific rate quote from a particular lender is one way to know where rates stand, but even then, things can change between the initial quote and closing for various reasons.?For a broader sense of mortgage rates, many people rely on a rate index. Freddie Mac’s weekly rate index is the most widely used, thanks to its broad circulation and long history. However, it has limitations when it comes to short-term accuracy, especially if you're interested in day-to-day changes.

Freddie's survey represents a five-day average, collected from Thursday through Wednesday and reported the next day. When markets move quickly, the data can become outdated, and sometimes, Freddie’s numbers miss the mark on significant rate shifts, as we've seen over the past five days. This discrepancy may result from the survey still relying on human input, even after methodology updates.

For example, it might be cheaper for a lender to offer you a 6.625% rate than a 6.75% or 6.875% rate. However, the 6.625% rate might come with upfront costs. To avoid those, the rate could be raised to 7.0% or higher. Lenders have different strategies for presenting these options, and no single rate index can fully capture those nuances.

With that in mind, here’s the latest on rates: today’s rates are holding steady at yesterday morning's levels. However, this week, they’ve risen significantly—much more than Freddie's weekly index indicates. While Freddie reports a 0.2% week-over-week increase, the average lender's rates have actually jumped by 0.37% since October 2. Depending on upfront costs, today's rate might be 0.50% higher than last Thursday’s, but with lower upfront costs for some borrowers.

Weekly Highlights:

List prices are gradually easing as we head into fall.?

The median list price marked?the fourth consecutive week of decline with a 1.1% dip. This is a typical seasonal pattern, yet despite the drop, the median list price remains 2.9% higher than the same week last year.

Property showings remain strong.?

This week marked?the third consecutive week showings have outpaced 2023 levels. Although showings are tapering off seasonally, they are still up 3.4% compared to last year, as buyers gain confidence due to increased supply and lower rates.

Contracts continue to rise.

There was an 8.2% increase in contracts on?homes over the same week in 2023, marking the fifth straight week of growth. The NJ/Philadelphia metro was the only area where contract numbers didn’t increase this week.