Mortgage News Daily’s Matt Graham on what to expect from mortgage rates

>> DOW FLUCTUATING AROUND THE FLAT LINE THERE. HIGHER INTEREST RATES ARE HITTING THE HOUSING MARKET. THE 30 YEAR FIXED RATE NOW AT 7.6%, JUST BELOW THAT TODAY, THE HIGHEST SINCE NOVEMBER OF 23. WHAT WILL IT TAKE FOR RATES TO CALM DOWN AND THE HOUSING MARKET TO BOUNCE BACK? LET'S ASK MATTHEW GRAHAM. HE'S THE CEO AT MORTGAGE NEWS DAILY. MATTHEW, FIRST OF ALL, CAN YOU EXPLAIN WHY WE KEEP SEEING DIFFERENT RATES? I SEE SOME CITE 7.3, SOME SAY 7.6. WHAT IS THE TYPICAL BUYER EXPERIENCING? >> YEAH, THAT'S A GREAT QUESTION. AND IT REALLY SPEAKS TO THE DIFFERENT MEASUREMENTS FROM WEEKLY SURVEYS LIKE FREDDIE MAC AND THE MORTGAGE BANKERS ASSOCIATION. AND THEN OF COURSE, OUR DAILY RATE INDEX. AND NONE OF THESE METRICS ARE WRONG. THEY JUST MEASURE THINGS IN A DIFFERENT WAY. SO THE WEEKLY SURVEYS HAVE A BIT OF A LAG BECAUSE THEY TAKE A FIVE DAY AVERAGE OF WHAT RATES HAVE DONE AND THEN REPORT IT THE NEXT DAY. AND IN FREDDIE'S CASE SPECIFICALLY, THEY DON'T INCLUDE UPFRONT POINTS IN THE METHODOLOGY. SO THAT CAN HAVE AN IMPACT AT A TIME LIKE THIS. WHEN UPFRONT POINTS AND BUY DOWNS AND DISCOUNTS ARE MORE COMMON. SO IF A HOME BUYER WANTS TO KNOW WHERE RATES ARE, GENERALLY SPEAKING, ON ANY GIVEN DAY, I'LL THROW YOU A CURVEBALL AND SAY THE BEST THING THEY CAN DO IS TALK TO A LOAN OFFICER THAT THEY HAVE A GOOD RELATIONSHIP WITH, AND SEE WHAT THE DIFFERENT MENU OF OPTIONS LOOKS LIKE. ALL OF THESE BIG PICTURE RATE INDICES ARE REALLY HIGHEST AND BEST USE. THEIR HIGHEST AND BEST USE IS TRACKING DAY OVER DAY CHANGE IN RATES, BECAUSE THE ACTUAL OUTRIGHT LEVEL WON'T NECESSARILY APPLY TO SOMEBODY'S INDIVIDUAL CIRCUMSTANCE. AS YOU KNOW, YOU KNOW, DIFFERENT CREDIT SCORES, DIFFERENT AMOUNT OF DOWN PAYMENT, ETC. CAN HAVE A BIG IMPACT ON WHAT IT'S GOING TO BE. SO FOCUS ON THE DAY OVER DAY CHANGE AND DON'T SWEAT THE OUTRIGHT LEVEL TOO MUCH. >> BUT I THINK IT'S CLEAR THE OUTRIGHT LEVEL IS GETTING TO A PRETTY SWEATY PLACE. YOU KNOW, IT'S MOVED A LOT IN JUST THE PAST COUPLE OF MONTHS. THINGS SEEM TO HAVE COOLED OFF QUITE A BIT OUT THERE. WHAT DO YOU SEE KIND OF REFI MORTGAGE APPS? DIANA WAS TALKING ABOUT THIS LAST HOUR. I MEAN, THE NUMBERS ARE DOWN. SO IS THIS AS BAD AS IT GETS OR COULD IT STILL GET WORSE FROM HERE? >> I TRY TO THINK BACK TO HIGH SCHOOL TRIGONOMETRY OR WHATEVER THE ASYMPTOTIC APPROACH TO SOME LOWER BOUNDARY. ANYTIME RATES RISE AS MUCH AS THEY HAVE, WE SEE THAT SORT OF GLIDE PATH DOWN TOWARD A LOW, FLAT LEVEL. AND THAT'S GOING TO BE PARTICULARLY TRUE FOR REFINANCES ANYTIME RATES SPIKE. BUT IT ALSO HAS SOME EFFECT ON PURCHASES AS WELL. ALTHOUGH THE PURCHASE MARKET HOLDS ITS OWN A BIT BETTER THAN THE REFI MARKET. SO IS IT AS BAD AS IT'S GOING TO GET? I MEAN, YOU KNOW, IT COULD GET A LITTLE BIT WORSE, BUT WE'VE REALLY SEEN A LOT OF THE BAD COME THROUGH SINCE 2022. AND THEN THERE HAVE BEEN SOME FLASHES OF HOPE WHEN RATES HAVE REBOUNDED. WE'VE SEEN REFIS PICK UP REFRESHINGLY WELL. AND WE'LL SEE THAT AGAIN NEXT TIME. RATES HAVE A LITTLE BIT OF A RECOVERY. >> WHAT DID THE CEO OF FORD SAY THE OTHER DAY ABOUT CARS? THE AVERAGE LOAN I THINK WAS 84 MONTHS. SO SEVEN WHATEVER. I THINK IT'S SEVEN, WHATEVER, SEVEN YEARS. MATTHEW. AGAIN, WE'RE NOT THE MATH SHOW, BUT WHATEVER SEVEN YEARS IS, IS NOW THE AVERAGE LENGTH OF A LOAN, WHICH MEANS SOME PEOPLE HAVE NINE AND TEN YEAR CAR LOANS, WHICH SEEMS INSANE. I WOULDN'T BE SHOCKED IF THE MORTGAGE INDUSTRY SAID, WHY DON'T WE HAVE A 40 YEAR LOAN? WHY DON'T WE HAVE A 50 YEAR LOAN? I KNOW IT SOUNDS WEIRD TO SAY THAT, BUT THEY'RE NOT GOING TO LET THINGS DO NOTHING FOR YEARS, I DON'T THINK. >> YEAH, I MEAN, INTERESTINGLY ENOUGH, IN THE SORT OF THE THE NERDY BACKROOM OF THE MORTGAGE INDUSTRY, WE THINK OF A 30 YEAR FIXED LOAN HAVING AN AVERAGE LIFESPAN AROUND SEVEN YEARS. >> SO THAT'S HOW LONG PEOPLE LIVE IN A HOME, ON AVERAGE. CORRECT. AND THEN THEY SELL SOMEBODY ELSE COMES IN. >> OR YES, THAT EITHER THEY THEY'RE SELLING TO MOVE UP OR MORE COMMONLY, ESPECIALLY OVER THE SECULAR BULL MARKET OF THE PAST 40 YEARS, UP UNTIL 2022, THERE WAS INCENTIVE TO REFI ON THE WAY DOWN. SO THOSE REFINANCES TOOK THOSE MORTGAGES OUT EARLY AS WELL, AVERAGES OUT TO ABOUT SEVEN YEARS. BUT THE MORTGAGE INDUSTRY IS ALWAYS TRYING TO FIGURE OUT EXACTLY HOW LONG MORTGAGES ARE GOING TO LAST. AND THAT'S KEY TO HOW RATES MOVE AS WELL. IN ADDITION TO JUST THE FOUNDATIONAL RATE MOVEMENT FROM TREASURIES. BUT THE DOING A 40 YEAR FIXED MORTGAGE, YOU KNOW, IT COULD LOWER SOMEBODY'S PAYMENT A LITTLE BIT, BUT IT'S NOT NECESSARILY A BIG SOURCE OF RELIEF. AND I THINK EVERYBODY'S COGNIZANT THAT THERE ARE GOING TO BE CYCLES IN INTEREST RATES. AND THIS ONE IS PARTICULARLY PAINFUL, YOU KNOW, WITH HOW LONG WE'VE BEEN AS HIGH AS WE'VE BEEN. BUT WHEN THE CYCLE TURNS