Freddie Mac Makes Their Mortgage Rate Survey WORSE!!!!!!!!!

Not only is the real estate industry news misleading, but the government is part of the con game they are playing.

This week, interest rates stayed stable at around 6.61%, despite all the global volatility and stock market drama.

Here you can see the actual market rate has stayed the same, but note the green line dropping, which is the government finally changing its methodology, but it is getting worse, more later.

Home sales have continued to be at prices over last year's price, yet it has declined from the summer highs, as is typical in a normal market.

I have had people say to me that price cuts show homes are dropping in price, but in reality, the prices, even after the drops, are higher than at the beginning of the year, higher than last year, and still at all-time highs.

OK, let's go back to the real estate news industry misinformation.

Are you familiar with 3 card monte, where the dealer has 3 cards and challenges you to find one of them?

Dave Chappelle recently had a great video and explained that the key is not just the dealer, but having people around that are in on the con. Here is a link to the video: https://youtu.be/BKATus5NNZ0

Freddie Mac, after years of their survey, being the worst in the industry, and really of no value other than news sites to use to fool their customers, FINALLY updates the methodology from 1971 from a survey to using some of the actual data they receive. You would think they know the real market rate since they are literally buying and selling securities of mortgages and repricing them constantly based on the market.

But INSTEAD of using the actual market price, Freddie Mac created a new inaccurate survey based on loan applications they receive. Now, don't get me wrong, counting the data you receive from customers is inherently better than sending out a survey, but, really, does this make sense? It is common practice for loan officers to turn in applications at rates higher than the market so if the rates go up while the buyer is shopping they are still approved. Also, it is curious that the rate is collected at the application when rarely the rate is locked, then when the rate is actually locked in or when the escrow closes. So, why would they choose the inferior option?

(Here is a link to the announcement with their methodology: https://www.freddiemac.com/research/pdf/202210-Note-PMMS-07.pdf)

One interesting note in their report is the proof that loans where borrowers pay discount points, presumably to lower the rate or "discount" the interest rate, really don't work. It turns out that in their survey the difference between loans where points are paid versus points that are not paid is negligible.

And they put this on their website? But next to no one even sees this?

OK, so my point is do not trust the news and do not trust Freddie Mac, but check out the actual data for yourself.

So, what to do?

If you are looking to buy a home and live there for a while, real estate has always been a great long-term builder of wealth and there is nothing to suggest that is changing if you can afford the home.

If you want to move or downsize, it's still a great market to sell, but a bit more challenging than in the last few years.

Finally, if you can find a property that will give you cash flow, this is a great time to get solid cash flow and enjoy the tax benefits of real estate.

How can I help you? Call, text, or email me.
BIll

Bill Gross
Broker Associate, BRE 01022275
Certified Probate Expert
Direct: 310-210-0008 , Bill@TheLAProbateExpert.com

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Bill Gross, The LAProbate Expert
I am a real estate broker in Los Angeles, CA focused on probate real estate and the leader of a team of over 1,100 agents nationally probate experts.

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