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This recent clip comes from my local paper's business section.  It exemplifies why researching mortgages can be confusing (and annoying).  We look to our newspapers to tell us the truth; to provide indisputable facts.

In this case, the paper misses the mark.

Aside from the spelling mistake in the headline (!), it looks like the local editors pulled irrelevant, stock copy written several years ago.  As we've shown here and here, the 10-year treasury note and mortgage bonds move to the beat of their own drum.

Rates for the 10-year treasury do not correlate to mortgage rates from day-to-day.

There's a reason why everyone from first-time home buyers to bona fide investors hate the mortgage process -- the media tells them one thing about mortgage rates, and in-the-game loan officers tell them something else.

The reason this happens is because mortgage rates and guidelines are fluid -- too fluid for even most loan officers to keep up.  It's why you should to question the mortgage news you read in the papers -- beat writers just can't keep up with the pace of change these days.

The best way to get your mortgage market news, therefore, is to go to the source.  Talk to loan officers and ask good questions.  Read blogs, follow twitterstreams, or whatever -- just make sure your source is someone in the business.  And, if you need some follow up, you can always call or .

I answer my own emails and would be happy to help.

Sometimes, it pays to look at the bigger picture.

With respect to the health of the housing market, now is one of those times. Despite what you're reading, the industry-wide housing recovery is well underway and it's based on basic economic principals that have held for hundreds of years.

Because of Supply and Demand, we can rationalize that the end of housing's freefall is in sight and that this is not a false positive.

Unfortunately, because of its chronic myopia, the American media-at-large is failing to connect the dots for the general public. 

Here's what I mean:

1. The number of "used homes" sold is rising. The press harps on falling prices.
2. Homes under contract are rising. The press ties it to "fire sales".
3. Builders cut new construction. The press says the collapse is accelerating.
4. Banks stop foreclosing. The press says it from sociopolitical pressures.
5. Fannie Mae lets investors expand their portfolios. The press ignores the story.

It's not that the press is wrong -- they're not.  It's just that the press is looking at each story individually instead of as a whole. Yes, prices are down and many homeowners are hurting.  Nobody will dispute that. 

Economic analysis, though, is like a Seurat. The story is not in the points, but how the points fit together.

Taking a step back from the headlines, we clearly see the other side of the story, the one that shows that the number of buyers are increasing; that builders are cutting back; that banks are keeping homes off the market; that Fannie Mae is giving investors permission to bid at auction. 

The Supply and Demand curve is shifting. It's providing the framework for a national housing recovery.

But it doesn't end there.  We also have to account for the recently-signed-into-law American Recovery and Reinvestment Act of 2009, a/k/a ARRA, a/k/a The Stimulus Plan.  In it, Congress grants an $8,000 tax credit to first-time home buyers.  Again, though, the press focuses on the wrong issue.  Instead of talking about showing that an $8,000 tax credit could add to the buy-side demand for housing, the press says a $15,000 tax credit would have been better.

Look. All the pieces are in place, folks.  Demand is rising. Supply is falling. The government is intent on keeping mortgage rates low.  It's very likely -- statistically -- that the housing recovery is already underway.  Home prices, after all, are a symptom; home inventories are a cause.

And, like A Sunday Afternoon on the Island of La Grande Jatte, if you focus on the minute details, you're going to miss the bigger picture. Just ask Cameron.

Each week, Freddie Mac publishes its Primary Mortgage Market Survey, a report of the nation's average mortgage rate-and-fee structure.  The media then grabs Freddie's press release and reports it to Americans in its newspapers, websites and television program.  It's through these channels that most Americans get their mortgage rate "news".

It's too bad for Americans because the press over-simplifies the survey.  Freddie Mac gives them two pieces of information -- (1) mortgage rates, and (2) mortgage fees -- but the press only reports on one of them -- rates.

Check out these headlines:

• Mortgage rates hit fresh, 37-year low (CNN Money)
• Mortgage rates fall to record low for second week (Salt Lake Tribune)
• 30-year mortgage rates hit new low (Chicago Tribune)

Factually, the headlines are accurate.  But, it's the second element of the press release that puts the headlines in context.  Sure, rates are down, but the fees lenders charge to get those rates is up.  By a lot.

According Freddie Mac's survey, mortgage rates were 0.38% cheaper at year-end versus the previous all-time low that was set in January 2008.  However, the average fees required to get that published rate lept by 0.400 percent over the same period of time. 

Let's put this in context, applying the numbers to a real-life, $300,000 conforming mortgage.

• January 2008 : $1,699 monthly payment, $1,200 loan fee
• December 2008: $1,628 monthly payment, $2,400 loan fee

A homeowner relocating to Cincinnati, for example, is saving $71 per month at today's Freddie Mac-published mortgage rates, but has to pay an extra $1,200 to do it. That makes for a 17-month "break-even" schedule -- hardly awesome.

So, we talk about this to remind you -- the headlines rarely tell the whole story.  Mortgage rates are lower, but the fees required to get them are not.  The chart above proves it.