By Sabrina Karl

When it comes to mortgage rates, a number of national averages are calculated by different entities. But the most-quoted is the Freddie Mac average, which comes out every Thursday morning.

Freddie Mac’s average is based on lender surveys from the start of the week, with most coming from Monday and some from Tuesday. As such, a shortcoming is that it is only a weekly average and can be skewed by capturing big changes early in the week or missing others occurring between Wednesday and Friday.

But what Freddie Mac’s average has going for it is that it is the most historically far-reaching average available, with data going back all the way to 1971.

Last Thursday, Freddie Mac notched its highest weekly average since April 2002, at 6.92%. Other averages had already reported 20-year highs, up to two weeks ago when rates surged in late September. But given its methodology of recording early weekly rates, the Freddie Mac average didn’t fully capture that spike and therefore didn’t set its own 20-year high til last week.

What’s also important to understand is that each mortgage average uses its own methodology. There may be different assumptions regarding applicants’ FICO scores, different criteria on points vs. no points, and so forth. For instance, Freddie Mac’s recent 6.92% average assumes fees and points of 0.8%.

Other notable averages are the Mortgage Bankers Association’s reading, which goes back to 1998 but is also only weekly, and Mortgage News Daily’s average, which has the strong advantage of providing a daily reading, but only as far back as 2008.

In other words, comparing today’s mortgage rates to the past is an imperfect science based on incomplete historical data and varying methodologies. But no matter your favored indicator, it’s clear these are notable times in the mortgage market.