Enhancements to Freddie Mac's Mortgage Rate Survey Methodology

This Research Note outlines the enhancements made to Freddie Mac's Primary Mortgage Market Survey® (PMMS) methodology, which has been a standard for mortgage interest rates in the United States for decades. The document details the adjustments implemented to improve the reliability and quality of the PMMS, including the transition from a traditional survey approach to utilizing loan application data from Freddie Mac’s automated underwriting system, Loan Product Advisor® (LPA). The enhancements aim to address challenges faced by the previous methodology, such as statistical bias and the need for accurate tracking of the evolving mortgage market. The note also discusses the limitations of the new approach, including the inability to report certain metrics like interest rates for hybrid adjustable-rate mortgages and average discount points. The methodology aims to ensure that the PMMS continues to provide valuable insights into the mortgage market while maintaining historical continuity.