By Sabrina Karl

If you’ve been paying attention to recent mortgage news, you’ll know that rates have been on a tear since this new year began. In fact, the 30-year fixed-rate average breached 4% week, the first time it’s done so since 2019.

However, you may feel you’ve been seeing mixed signals in the news. If last week was so notable for breaking the 4% threshold, why did Freddie Mac report on Thursday that mortgage rates were only up to 3.69%?

Freddie Mac has been the primary mortgage rate reference for decades, and as such, its average is widely quoted in the media. Having tracked lender rates since 1971, Freddie Mac provides one of the best tools for historical reference, letting anyone see rates and trends for any period in the past 50-plus years.

However, Freddie Mac surveys lenders on rates just once a week. What it publishes on Thursdays is averaged from rates supplied on Monday, with a small proportion of lenders supplying Tuesday rates. In other words, Freddie Mac’s average largely measures weekly movement from one Monday to the next, and then published three days later.

In periods when rates are relatively stable, a weekly average that lags by 2-3 days won’t show much difference from a daily average measuring every weekday tick. But that’s not been the case in much of 2022, and especially last week. By the time Freddie Mac reported its average last Thursday, rates had moved dramatically upward since Tuesday. Had Freddie Mac’s average been calculated Thursday instead of Monday, the result would indeed have been much closer to 4%.

That’s not to say Freddie Mac’s average isn’t useful, as it does capture broad trends. Just understand that it’s primarily a Monday snapshot, so anyone needing more daily detail will want to search out sources.