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Back to Work
By Jeff Walton & Kelly Guest
Even though we were coming off a holiday weekend, a lot of news happened in the afterglow of America’s 250th anniversary. Optimal Blue’s June Market Advantage says conforming loans are just under half of all production, while ICE’s July Mortgage Monitor suggests rates may have topped out for the year. We’ll see Kevin Warsh on Capitol Hill this week and the CPI hits tomorrow. The second half of the year is well underway.
Table of Contents
CHATTER
How bipartisan is the ROAD to Housing Act?
American Property Owners Alliance Details Support
New national polling shows overwhelming bipartisan support for the 21st Century ROAD to Housing Act, highlighting a shared belief that America needs more housing opportunities and practical solutions. The legislation includes proposals to:
Increase the supply of affordable housing
Convert vacant and abandoned buildings into homes
Expand access to small dollar mortgages
Help keep single family homes within reach of families
Improve housing options for veterans
Out of the Car, Into the House
Kelley Blue Book Starts Seller Platform
While Zillow and Realtor.com try to capture and dominate the buyer, Blue Book is going after the seller side. After they get a homeowner’s info and give them their “Free - $249 Value” evaluation, they offer agent consults.
Only 20 Years? FL Fraudster Ran $65M Appraisal Scam
Armando Martinez got his own appraisal license revoked, so he took over the identity and license number of a legitimately licensed appraiser. The DOJ says more than $65 million in mortgages are impaired or defective due to Martinez. In some cases, he sent people to photograph properties while he "did appraisals" from the Dominican Republic. He was sentenced to 20 years after pleading guilty to bank fraud.
Big Pitch Finalists Announced: Rocket Says Videos & Voting Will Be Up 8-4
The winning tech idea will get their idea built – and $100K prize.
CFPB Asking for Comment on TRID Disclosure Changes
One they’re considering: “exempting rate-and-term refinancing (including cash-out refinancing) from rescission rights.”
MOVING & SHAKING
Former FHA Commissioner Frank Cassidy returned to Walker & Dunlop as senior managing director.
MBA brought Marlana Scott Voycik on as AVP of Membership.
Docutech and Talk'uments announced a new integration designed to help lenders improve borrower understanding, accessibility, and transparency throughout the mortgage process. The integration helps borrowers in multiple languages.
UWM expanded its doctor loan Programs to more practitioners - including nurses, physician's assistants, chiropractors, and more.
MARKET/INDUSTRY
Last week wasn't too bad, and this week we have CPI coming out and Kevin Warsh on Capitol Hill for semi-annual testimony. Bill Bodnar has what to watch in his latest Master the Markets segment.
Mortgage Rates Hover in Mid 6% Range: Freddie 7-9-26
Mortgage Applications Decreased 2.2% from One Week Earlier: MBA Weekly Survey for the week ending 7-3-26. This week’s results include an adjustment for the Fourth of July holiday.
Longer view looks better…
NAR June EHS
Month-Over-Month
2.4% decrease in existing-home sales—seasonally adjusted annual rate of 4.09 million in June
0.6% decrease in unsold inventory—1.56 million units equal to 4.6 months’ supply
Year-Over-Year
2.8% increase in existing-home sales
1.8% increase in median existing-home sales price to $440,600
“The back-and-forth in monthly home sales activity, driven by mild fluctuations in mortgage rates, shows how sensitive home buyers are to affordability conditions. However, job gains—more than half a million since the beginning of the year—will continue to provide support for the housing market.”
“The median home price has reached an all-time high. Even so, affordability is better than a year ago because wage growth is outpacing home price growth.” - NAR Chief Economist Lawrence Yun.
Optimal Blue’s June Market Advantage:
Conforming stays below 49%: Conforming share declined to 49% of total production in June,extending the decline that first pushed it below 50% in April. Non-conforming lending expanded to more than 19% of volume, its highest share in several years. FHA represented nearly 19% of production, while VA loans accounted for almost 13%.
Refis hold steady: Refinance share remained essentially unchanged at 19% of total lock volume in June, materially higher than levels seen throughout much of 2025. Cash-out refinance volume grew 11% MoM and 10% YoY. Rate-and-term refinance volume increased 6% MoM and 32% YoY.
Purchase momentum builds: Purchase lock volume increased 10% MoM and 14% YoY, reaching its highest level since early spring. Purchase loans accounted for more than 81% of total lock volume in June.
Non-QM remains elevated: Non-qualified mortgage loans accounted for 9% of total lock volume in June, 1.4 percentage points higher than a year ago.
DTI ratios remain below year-ago levels: Purchase debt-to-income ratios held below 2025 levels across all major products: conforming borrowers at 36.6%, FHA at 43.5% and VA at 43.0%, suggesting affordability has modestly improved relative to last year despite higher home prices.
New construction strengthens: Planned unit developments (PUDs), a proxy for new construction activity, increased to 28% of total volume. Single-family detached homes remained the dominant property type at 64% of production. Condo share held at 6%.
Rate Predictions
ICE Mortgage Rate Futures prices suggest the market largely anticipates mortgage rates to hold steady in the near term, with a modest improvement of about one-eighth of a percent, to 6.35%-6.40%, priced in by October.
App Activity
Purchase applications have held largely stable in recent weeks despite mortgage rates hovering near 6.5%, with adjusted volumes roughly equivalent to those seen in August 2025 when rates were in a similar range.
Applications were up 6% YoY in May and June as rates remain 30 to 45 bps below year-ago levels.
Overall, purchase applications continue to run just over 30% below their 2018-2019 same-week averages, but are up 30% over the past two-plus years as the housing market slowly recovers.
Generational Trends
Gen Z is making up a growing share of purchase lending — and lenders should make sure their technology is ready.
Gen Z — the oldest of whom are now 29 — made up 20% of second-quarter purchase rate locks, up from 16% a year ago, marking their largest share of purchase lending to date as they continue to age into their homebuying years.
As expected, they make up a noticeably higher share of FHA lending, 27%, compared with 19% of VA and 17% of conventional mortgages.
They also account for more than a third of first-time homebuyers in the market.
Together, Gen Z and Millennials account for nearly 2/3 of the 2026 purchase lending market — a clear sign that younger, more tech-savvy generations now dominate purchase mortgage lending.
Split (wealth) screen
Year-over-year price growth picks up pace, up 0.8% in May 2026, from 0.6% in April.
Three-month price momentum, up 1.6%, suggests strong seasonal surge, yet highly concentrated in affordable Midwestern hubs and elite equity havens.
Annual home price gains are now more widespread across markets.
"The U.S. housing market in mid-2026 remains firmly entrenched in a geographic split, shaped fundamentally by an affordability gap and a wealth gap that continues to divide buyers across the nation.”
"What we are witnessing is a profound segmentation of opportunity. Buyers who are well-insulated from mortgage rate volatility—bolstered by substantial accumulated home equity and robust wealth gains—are continuing to look at high-value regions like San Francisco, driving a strong near-9% annual rebound in a market that remains fundamentally healthy and structurally undervalued relative to long-term income baselines." - Cotality’s Chief Economist, Dr. Selma Hepp