Hvac- Thank you for your response. Yes, I have the manual and I did set the optimal heat setting to 4. I thought about setting it to 3, but it is not a 90+ furnace. Maybe I should try 5? I did also consider insulating behind the thermostat, but the wall cavity leads directly into the garage, which is cold; so if anything, the thermostat should be reading a colder temp than actual. And even if the surrounds were causing a misread, it still doesn't explain why the temp reading starts going up so quickly after I turn up the heat.