Morning Brief — Wednesday, April 1, 2026

Today's Headlines

Economic Data

March ISM Manufacturing Expands for Third Straight Month, But Prices Index Hits Highest Level Since June 2022

The Institute for Supply Management's March Manufacturing PMI came in at 52.7%, up 0.3 percentage points from February's 52.4%, signaling the third consecutive month of factory expansion and the 17th straight month of overall economic growth. New orders held strong at 53.5%. The real headline buried inside the report: the ISM Prices Index surged to 78.3%, a 7.8-point jump and its highest reading since June 2022, driven by tariffs on steel and aluminum, across-the-board import duties, and oil prices inflated by the Iran conflict. Manufacturing is genuinely growing, which is good. The input cost story requires watching closely heading into Thursday's PCE release.

Rates

30-Year Fixed Falls to 6.29% for Second Straight Day as Bond Market Continues Recovery

Mortgage rates have now declined 18 basis points over two sessions, with the 30-year fixed reaching 6.29% — the lowest reading since early March. The 10-year Treasury is holding at 4.28%, supported by continued Iran de-escalation sentiment and quarter-end inflows carrying over from Tuesday's bond rally. All five major housing authorities now project the 30-year fixed to average below 6.38% in Q2, with forecasts ranging from 5.50% to 5.90% by August depending on the pace of Fed cuts. This two-day run is beginning to look like the start of a sustainable trend rather than a short-lived bounce.

Inflation Watch

Core PCE Report Tomorrow Is the Week's Most Important Data Point for the Rate Outlook

The Bureau of Economic Analysis releases February's Personal Consumption Expenditures price index Thursday morning, and it's the data point the Federal Reserve actually uses to calibrate policy. The Fed's dual targets require core PCE to move meaningfully toward 2% before rate cuts are back on the table. Market consensus expects a modest softening from January's elevated levels, but oil-driven goods inflation and persistent services costs create upside risk. A soft print tomorrow keeps the summer rate-cut thesis intact and could push the 30-year fixed below 6.25% by the end of the week. A hot print puts pressure on the recent rally.

Calendar Risk

Good Friday Gap Risk: March Jobs Report Drops April 4 With Bond Markets Closed

The March Employment Situation report releases Friday, April 4, while bond markets are closed for Good Friday. That creates a rare gap risk scenario where the market's entire price reaction to the jobs print gets bottled up until Monday morning, April 7. February's -92,000 payroll loss was a significant shock, and if March's number confirms a deteriorating labor market, the Monday open could see a sharp rate move in either direction. Brokers with clients in active rate locks should note the Friday-through-Monday window as a period of elevated volatility, and borrowers with flexible timelines may want to consider their lock strategy this week.

Non-QM Spotlight

📋

P&L Loans: A Different Tool for a Different Business Owner

Profit and loss statement loans are often confused with bank statement loans, but they serve distinct borrower profiles. P&L programs use 12-24 months of CPA-prepared profit and loss statements to document income, which works best for business owners who maintain separate business and personal banking or run cash-intensive operations where deposit patterns don't clearly reflect income. For brokers with a CPA or small business attorney in their referral network, P&L programs open a pipeline of qualified buyers who most originators don't know how to serve.

🔄

The Non-QM Refinance Wave Is Building: Are Your 2024 Clients Ready?

Borrowers who closed non-QM loans in 2024 at 7.5-8.5% are approaching the break-even window on a rate/term refinance if the 30-year keeps falling toward 6% and below. For brokers, now is the time to audit your 2024 closed file list and identify candidates. A non-QM rate/term refi doesn't require a new income qualification event in many cases, just updated docs. Getting ahead of this wave before it's obvious to every competitor in the market is a significant first-mover advantage in client retention.

🏛

Mixed-Use Properties: Non-QM Financing for the Deals Agencies Won't Touch

Properties combining residential and commercial uses — ground-floor retail with upstairs apartments, live-work units, small office with residential above — don't qualify for conventional or FHA financing. Non-QM DSCR programs can underwrite these assets on rental income from both the commercial and residential components, making them viable for real estate investors in urban or main-street markets. With inventory of mixed-use properties available at prices that would have been unthinkable in 2022, there's real opportunity here for brokers working with investor clients.

📈

One-Year Tax Return Programs: Income Trajectory Matters

Standard mortgage qualification requires two years of tax returns, which creates a problem for borrowers who had a weak income year followed by strong recovery — a common pattern for entrepreneurs who ramped up a new business in 2024 and hit their stride in 2025. Select non-QM lenders offer one-year tax return programs that base qualification on the most recent 12-month period only. For borrowers with a credible income trajectory and a CPA who can document the story, this is a meaningful path to homeownership that most originators don't know to offer.

Nate's Take

Two days in a row of falling rates, a manufacturing economy that's genuinely expanding, and Q2 forecasts from every major housing authority pointing toward the high 5s by summer. There is a lot working in our favor right now. The ISM Prices Index at 78.3% is eye-catching, but it's a lagging input cost story driven by tariffs on steel and aluminum and oil inflated by the Iran conflict. Core PCE tomorrow is what the Fed actually watches, and if it moderates even slightly, it keeps the case for summer rate cuts alive. A soft print could take the 30-year through 6.25% by Friday. That's the number to watch in the morning.

For brokers, the setup this week is genuinely good. Rates are at their lowest point in a month. Inventory continues to climb. Sellers are making concessions. And the non-QM toolkit is deeper and more competitive in 2026 than it has ever been. PCE tomorrow gives you a natural reason to call clients on the fence, and Monday's jobs-report gap risk is worth a conversation with anyone in an active lock. You don't have to manufacture urgency in this market. The calendar is creating it. Use it.