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Keys Under the Tree?
By Jeff Walton & Kelly Guest
Shame on your InGeniusly Speaking team for bringing up Christmas before Halloween, but HousingWire's Logan Mohtashami asks a provocative question: "Can mortgage rates get under 7% for the holidays?" HW's expert analyst lays out the 'ifs' and 'hows' that could drive home buyers from the malls to the negotiating table. Similarly, Bill Bodnar wonders if the "cure for higher rates is…higher rates?" Bill breaks down last week's wild ride for yields and what to watch this week in his latest Master the Markets segment.
Table of Contents
CHATTER
Banks Did Better
Bank servicers have the digital edge: JD Power 2026 US Mortgage Servicer Digital Experience Study
Overall satisfaction with bank servicer apps averages 736 (on a 1,000-point scale), compared with 680 for mortgage-focused servicer apps. Websites show a similar gap: 740 vs. 704, respectively. Additionally, bank servicer customers are more likely to have other accounts or products with them (74% vs. 22%) and be very familiar with its website or app (60% vs. 40%). Overall satisfaction scores among bank servicer customers are higher than among mortgage-focused servicer customers at every level of website/app familiarity.
Study Rankings
This year, the study recognizes the highest-ranked brands across four categories: bank servicer mobile apps and websites, as well as mortgage-focused servicer mobile apps and websites.
1. Chase ranks highest in mortgage servicer app satisfaction among bank servicers, with a score of 760. Bank of America (749) ranks second and Wells Fargo (738) ranks third.
2. Bank of America ranks highest in website satisfaction among bank servicers, with a score of 766. Wells Fargo Home Mortgage (752) ranks second and PNC Mortgage (748) ranks third.
3. Rocket Mortgage ranks highest in app satisfaction among mortgage-focused servicers, with a score of 719. Lakeview (705) ranks second.
4. Rocket Mortgage ranks highest in website satisfaction among mortgage-focused servicers, with a score of 739. Freedom Mortgage (715) ranks second and Lakeview (710) ranks third.
Buyer Imbalance
Outnumbered: 63% More Sellers Than Buyers - Redfin
· House hunters had more negotiating power in September than they’ve had since the housing market crashed after the 2008 financial crisis, with 63% more home sellers than buyers.
· The number of buyers in the market dipped to the lowest level in records dating back to 2013, while the number of sellers rose to its highest level since 2020.
· 41 of the 50 most populous U.S. metro areas are buyer’s markets, the most in our records, led by Miami, Nashville and Houston.
· There are just 5 sellers’ markets: San Francisco, and a few Northeast metros.
MOVING & SHAKING
Optimal Blue Acquires Usherpa: The company announced it has acquired Usherpa, a marketing automation and borrower relationship engagement platform purpose-built for mortgage professionals. The acquisition expands Optimal Blue’s ability to help lenders win more business by bringing borrower engagement capabilities closer to the product, pricing and eligibility solutions.
Longbridge Financial named Larissa Morrell vice president of product development. Her expanded role includes helping shape the company’s home equity offerings for homeowners 55 and older.
Global alternative investment firm specializing in asset-based private credit Castlelake announced the appointments of Luke Jackson and Betsy Sylvester to Partner.
New American Funding recruited Will Mullinix and his team to expand presence in the Carolinas.
MARKET/INDUSTRY
Mortgage Rates Average 7.40%: Freddie 10-15-26.
Mortgage Applications Decreased 2.7% from One Week Earlier: MBA Weekly Survey for the week ending 10-9-26.
· The MBA’s Builder Application Survey (BAS) data for September 2026 shows mortgage applications for new home purchases decreased 8.3% from a year ago. Compared to August 2026, applications decreased by 8%. This change does not include any adjustment for typical seasonal patterns.
Increase in the slowdown?
Slowest 2 Months of the Year: NAR EHS 9-26
Month-Over-Month
· 1.5% increase in existing-home sales to a seasonally adjusted annual rate of 3.99 million in September
· 1.9% increase in unsold inventory to 1.60 million units, equal to 4.8 months’ supply
Year-Over-Year
· 2.2% decrease in existing-home sales
· 1.3% increase in median existing-home sales price to $417,500
“Despite the small monthly gain on a seasonally adjusted basis, August and September marked the two slowest months for home sales this year. Further increases in mortgage rates in recent weeks mean fewer buyers can qualify to purchase a home.” - NAR Chief Economist Lawrence Yun
Solid New Construction & First-time Buyer Activity
Non-QM and ARMs Up: Optimal Blue September Market Advantage
VOLUME TRENDS AND MARKET COMPOSITION
· Refi pressure intensifies: Refinance share fell to 18% of total production. Cash-out refinance volume declined 8% MoM and 23% YoY, while rate-and-term refinance volume fell 13% from August and 82% YoY.
· Purchase demand holds near year-ago levels: Purchase lock volume declined less than 1% both MoM and YoY, accounting for 82% of total lock volume in September, but was down 20% over the past three months.
· Conforming share retreats: Conforming share declined 71 bps MoM to 46%, while non-conforming share increased 285 bps to nearly 24%. Compared with a year ago, conforming share was down more than 6 percentage points and non-conforming share was up nearly 7 percentage points. FHA represented 18% of production while VA accounted for 11%.
· Non-QM bucks broader decline: Non-QM lock volume increased 8% MoM even as total lock volume declined 2%.
· Non-QM loans accounted for 12% of September production, up 117 bps MoM, 357 bps over the past three months and 478 bps YoY. Investor and debt service coverage ratio (DSCR) loans represented 33% of non-QM activity, bank statement loans accounted for 30% and other expanded guideline programs made up the remaining 37%.
· ARM share reaches series high: Adjustable-rate mortgages reached 14% of total lock volume in September, up from 10.5% in August and the highest share in Market Advantage data going back to 2019.
· New construction activity holds steady: Single-family detached homes represented approximately 64% of production. Planned unit developments (PUDs), a proxy for new-construction activity, accounted for 28% of volume, down modestly MoM, but approximately 1% higher YoY. Condos accounted for approximately 6% of production.
PRODUCT MIX AND BORROWER PROFILES
· First-time buyers remain active: First-time homebuyer share was approximately 44% for conforming purchase locks, 70% for FHA and 46% for VA. FHA and VA first-time homebuyer shares increased modestly MoM while conforming share declined roughly half a percentage point.
· DTIs drift higher: Purchase debt-to-income (DTI) ratios increased slightly in September, with conforming borrowers at 37.1%, FHA borrowers at 44.0% and VA borrowers at 43.8%.
· Credit quality strengthens: The average credit score across all locks nationwide was approximately 731 in September. Purchase credit scores averaged approximately 736, cash-out refinance scores averaged approximately 698 and rate-and-term refinance scores averaged approximately 741. Average loan-to-value (LTV) remained just above 80%.
· Pull-through moves in opposite directions: Purchase pull-through declined 270 bps MoM to 82.2%, while refinance pull-through improved 181 bps MoM to 74.6%.
· Loan amounts rise: The average locked loan amount increased more than 2% from August to approximately $397,000, moving back toward the $400,000 threshold despite the decline in overall volume.