Morning Brief — Thursday, September 24, 2026

📊Mortgage Market Snapshot

Rates are mixed today. The 30-year fixed ticked up 6 basis points to 6.98%, while the 15-year fixed eased 6 basis points to 6.42% and the 5/1 ARM pulled back a sharp 29 basis points to 6.70%, per Zillow's lender marketplace data. The real story isn't the daily noise, it's the bond market: the 10-year Treasury closed yesterday at 5.13%, its highest level since 2007, and that's what's keeping long-term mortgage pricing elevated even as shorter products found some relief.

The macro backdrop explains why. The Fed hiked 25 basis points on September 16 to a target range of 3.75% to 4.00%, its first increase since July 2023, in a unanimous 12-0 vote. Fed Chair Kevin Warsh didn't mince words, saying inflation "is too high, and has been for too long," pointing to an August CPI print of 3.4% year over year and energy costs pushed higher by crude oil crossing $100 a barrel. Yesterday, Fed Governor Michael Barr said more increases are still needed to tame sticky inflation, and S&P Global's flash PMI showed private sector output growing at its fastest pace in over five years, which is exactly the kind of strong data that keeps a hawkish Fed on track. Sixteen of eighteen FOMC participants now project at least one more hike before year end.

For brokers, that combination, elevated fixed rates plus a Fed that isn't done, means the "just wait for rates to fall" conversation needs to change through at least Q4. It also means Non-QM deserves more airtime than usual. DSCR pricing has compressed to roughly 50 basis points over conventional, down from 75 to 100 basis points a year ago, so investor deals are penciling better even while the headline rate environment stays elevated.

⚡ This Week's Focus

Friday's Durable Goods Orders are a lighter read, but next week is the real catalyst. Core PCE and the GDP revision both land Wednesday, September 30, followed by the September jobs report on October 2. With the Fed already signaling one more hike this year, a hot PCE print keeps the 10-year pinned near current levels and mortgage rates elevated into October.

📰Industry Headlines

Fed Policy

Fed Hikes to 3.75%-4.00% in Unanimous Vote, More Increases Signaled for Year End

The Federal Reserve raised its target range by 25 basis points on September 16, the first increase since July 2023, in a 12-0 vote. Fed Chair Kevin Warsh said inflation "is too high, and has been for too long," pointing to an August CPI print running 3.4% year over year and energy costs pushed higher by crude oil crossing $100 a barrel. Sixteen of eighteen FOMC participants now project at least one more hike before year end, with four seeing two. For brokers, that means the "rates are about to fall" pitch to hesitant buyers needs retiring, at least through the fourth quarter.

Source: CNBC, Chase, Fox Business — September 2026

Bond Market

10-Year Treasury Tops 5.13%, Its Highest Close Since 2007

Strong economic data collided with hawkish Fed commentary to push the 10-year yield to its highest level in nearly two decades. S&P Global's flash PMI showed private sector output expanding at its fastest pace in over five years, and Fed Governor Michael Barr said Wednesday that more rate increases are needed to tame sticky inflation. Mortgage pricing tracks the 10-year more closely than the fed funds rate itself, so this move is doing more to keep the 30-year elevated than the September hike alone. Any pullback in yields from here should translate into rate relief within days.

Source: Vantage Markets — September 2026

Non-QM

Non-QM Captures Record 11.3% of Mortgage Lock Volume in August

Non-QM production hit its highest share of total rate-lock volume in the three years Optimal Blue has tracked the data, up a full point from July and 2.9 points year over year. Investor and DSCR loans now make up 35.1% of Non-QM production, up 6.66 points annually, while bank statement loans slipped to 29.8% of the mix. Kiavi data shows DSCR rates have compressed to roughly 50 basis points over conventional pricing, down from 75 to 100 basis points a year ago. That narrower spread is the single best argument brokers have right now for moving investor clients off the sidelines.

Source: National Mortgage Professional, Optimal Blue data — September 2026

Wholesale Channel

Foundation Mortgage Expands Non-QM Wholesale Lending Into Montana

Miami Beach-based Foundation Mortgage Corporation added Montana to its wholesale footprint, giving brokers there access to bank statement, DSCR, 1099 income, asset qualifier, and profit-and-loss loan programs. CEO Marc Halpern framed the move as part of a broader push to help brokers serve borrowers who don't fit traditional guidelines. It's a reminder that Non-QM capacity keeps expanding even as conventional volume stays rate-constrained, and that geographic coverage gaps among wholesale partners are closing fast.

Source: GlobeNewswire — September 24, 2026

Housing Market

Housing Starts Slip 2.6% as Single-Family Rebounds and Multifamily Craters

Overall housing starts fell to a 1.28 million annualized pace in August, but the headline number hides a split market. Single-family starts rose 7.6% for the month and are up 5.2% year over year, while multifamily starts dropped 21.7% monthly and 14.6% annually. NAHB Chairman Bill Owens pointed to higher mortgage rates, construction financing costs, and affordability pressure as the drag, and the group's forecasters said builders remain cautious on permits. For brokers, the single-family rebound is the more useful data point when talking to purchase clients about inventory finally loosening in some markets.

Source: NAHB, Eye on Housing — September 2026

💬Consumer & Investor Talking Points

"This is the best DSCR pricing we've seen in over a year."

For Real Estate Investors

DSCR spreads over conventional rates have compressed to about 50 basis points, down from 75 to 100 basis points twelve months ago, and DSCR now makes up over a third of all Non-QM production. That's a provable pricing improvement, not a sales pitch. Pair that with rents that have kept climbing in most metros, and coverage ratios are easier to hit than they were a year ago. If an investor client has been waiting for a "better time," the math has genuinely gotten better while they waited, though that spread compression isn't guaranteed to hold if the Fed follows through on the additional hikes it's signaling.

"Your tax returns don't have to be the reason you can't buy."

For Self-Employed Borrowers

With the Fed signaling at least one more hike this year and the 10-year sitting at its highest level since 2007, conventional underwriting isn't getting any more forgiving for income that doesn't fit neatly on a W-2. Bank statement and 1099 income programs are built for exactly this environment, and lender capacity keeps expanding, Foundation Mortgage just added a new state to its wholesale footprint this week alone. The conversation now is less "can you qualify" and more "which documentation path gets you the best rate," because that answer has genuinely changed over the past year.

"Waiting for rates to drop might cost you more than locking today."

For Buyers on the Fence

The Fed just hiked for the first time since 2023, and sixteen of eighteen committee members expect at least one more increase before year end. The 10-year Treasury, which drives mortgage pricing more directly than the fed funds rate, just closed at its highest level since 2007. None of that points toward near-term relief, and next week's GDP, PCE, and jobs data could push things either direction. For a buyer who's financially ready, this is the moment to have an honest conversation about what "waiting for rates to fall" is actually costing them right now, versus locking a slightly higher rate today with a plan to refinance later.

📅Economic Watch

Background · This Month

Fed Raises Rates to 3.75%-4.00%

The September 16 hike was the Fed's first since July 2023, passed unanimously, and was driven by an August CPI print showing 3.4% year-over-year inflation and elevated energy costs. Sixteen of eighteen FOMC members project at least one more hike before year end. This is the backdrop for every rate conversation happening right now.

Medium Impact · Tomorrow

Durable Goods Orders (August)

A read on big-ticket manufacturing orders releasing Friday morning. It's a secondary data point for mortgage pricing but can move Treasury yields on a surprise in either direction, especially with markets already jumpy after this week's yield spike.

High Impact · Next Week

Core PCE Price Index and Q2 GDP (September 30)

The Fed's preferred inflation gauge lands the same day as the GDP revision, and it's the most important data point before the next FOMC meeting. A hot core PCE number validates the market's two-more-hikes pricing and keeps the 10-year pinned near recent highs, while a cool print is the clearest path left toward mortgage rates easing before Q4 ends.

High Impact · Next Week

September Jobs Report (October 2)

Following JOLTS job openings on September 29 and the ISM Manufacturing PMI on October 1, the jobs report closes out a heavy data week. A soft print would complicate the case for additional hikes even with inflation running hot, so this is the number most likely to shift the Fed's next move.

⚡Quick Hits

📉The 5/1 ARM pulled back 29 basis points today to 6.70% even as the 30-year crept higher, a reminder that ARM pricing can move independently of the broader rate story and is worth a second look for shorter-horizon buyers.

🏗️Single-family housing starts jumped 7.6% in August while multifamily fell 21.7%, a split worth mentioning to any purchase client who assumes all the housing data is bad news right now.

💵Non-QM just posted its best month on record at 11.3% of lock volume, with DSCR and investor loans doing most of the heavy lifting. If you're not having the DSCR conversation with your investor-heavy referral partners, you're leaving volume on the table.