Mortgage

CNBC mortgage rates coverage really confuses readers

And the reaction isn't good

This morning's coverage of the normally humdrum weekly mortgage applications report from the Mortgage Bankers Association got a little spicier when CNBC decided to go out on a limb.

[Shameless plug alert: Read HousingWire mortgage app coverage for all the data from the report.]

The Realty Check article, written and edited by Diana Olick, performed the classic bait-and-switch, which totally confused its readers judging by their negative reaction.

The headline reads: Higher mortgage rates not deterring buyers.

Yet the lead follows with, first, a suspicious truism and then even greater conjecture: "Rates are not the driving factor for home sales. At least that's what the correlation between rate moves and mortgage applications to purchase a home suggests," the report reads.

But then there is even more questionable copy fill.

Here is one of the source quotes in the piece:

"Rates have adhered to this range for two months," noted analysts at Mortgage News Daily. "The visits to the lowest levels have been progressively [more frequent]. This could indicate that the longer-term momentum is pointing very slightly higher, and we'd need to see a move below late-June lows to rule that out."

It is not written by "analysts," for one, it's written by Chief Operating Officer Matthew Graham of Mortgage News Daily in his report yesterday. And it is given as a "cautionary note" (see beginning of full quote, which CNBC edited out), which translates as precisely a deterrent, the opposite of what the CNBC headline suggests.

Why is this? The quote needed tinkering to get it to fit the headline, I'm guessing. But it's apples and oranges as I will explain below, and the tangled logic did not go unnoticed by the readers.

Oddly enough, there are thoughts on the originations market — what Olick is talking about — elsewhere in the very same Mortgage News Daily note. Indeed five loan originator perspectives are given that are much more applicable to today's MBA report. Graham, for his part, is speaking strictly of rate behavior and the impact on the secondary market.

CNBC deserves some credit for attempting to jazz up an otherwise uninteresting report. It certainly got plenty of readers discussing the issue, but not in a favorable way.

Disregarding the out-and-out attacks on each other, many readers did not appear to fully get the coverage.

"4.28 to 4.32 is 'high'? Maybe the author is." reads one comment.

Here's another:

What kind of title is this: "Higher mortgage rates not deterring buyers"? Rates went up 4bp which would mean a few dollars a month for the average home. Rates are still historically low by any measure. The fundamental issue is that mortgage credit has gotten so contrasted that 30% of those that want to buy a house can't qualify. Lets write about that.

Prolific online commenter Logan Mohtashami (in my opinion a must-follow on Twitter) tries to help sort it out:

"We have higher inventory this year but we simply don't have the demand for existing home sales to show growth, even with 32% cash buyers as their volumes are less even though their % is higher

New home sales should have 8-12% total sales growth though"

Mohtashami speaks of the lack of demand, and that is part of it.

But what is really deterring buyers? And yes they are being deterred.

It's the lack of credit and the lack of confidence in the entire process. All signs point to a contracted market.

Click-grabbing headline writing at CNBC really confused its readers, as it did me.

It's no wonder they are reluctant to buy a home.

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