What This Means for the Mortgage Market (and Why It Matters)
June was a solid month for the mortgage industry. Overall mortgage applications that were locked in increased 10% from May and were 15% higher than last year, showing that buyers are still active despite rates remaining in the mid-6% range.
🏡 Home Purchases Are Still Driving the Market
Most of the mortgage activity is still coming from people buying homes.
- Purchase loans made up 81% of all mortgage locks.
- Purchase activity increased 10% over May.
- Refinances also increased, but they still account for only about 19% of total mortgage volume.
📈 Non-QM Loans Continue to Grow
This is the part that really caught my attention.
Non-QM lending is continuing to gain momentum, especially for real estate investors.
The biggest growth came from investor loan programs like:
- DSCR loans
- Other investment property financing options
Investor loan locks jumped dramatically compared to both last month and this time last year, showing that more investors are entering the market and lenders are meeting that demand.
Interestingly, bank statement loan volume slipped slightly, suggesting that while self-employed borrowers remain active, investor-focused programs are seeing even faster growth right now.
💰 Mortgage Rates Could Stay Higher
The article also points out that mortgage rates may remain elevated because of:
- Ongoing inflation concerns
- Growing federal debt
- Uncertainty surrounding Federal Reserve leadership
These factors have pushed mortgage pricing higher, and many experts believe rates could remain somewhat elevated in the near term.
👍 There Is Some Good News
Even though home prices continue to rise, affordability showed a small improvement.
Borrowers are qualifying with slightly lower debt-to-income (DTI) ratios than they were last year. That suggests buyers may be adjusting by:
- Purchasing homes that better fit their budgets
- Making larger down payments
- Benefiting from modest improvements in mortgage pricing compared with 2025
My Take as a Non-QM Lender
For those of us who specialize in Non-QM lending, this is encouraging news.
The market is showing that:
- Investors are becoming more active.
- Flexible financing solutions are becoming more important.
- Non-QM products are moving further into the mainstream instead of being viewed as niche loan programs.
If you’re a loan officer or real estate agent, this is another reminder that understanding products like DSCR loans, bank statement loans, and other Non-QM options can help you serve more clients who don’t fit traditional lending guidelines.
As more borrowers have non-traditional income or invest in real estate, the demand for these products is likely to continue growing.
