Non-QM mortgage locks rose 8% month over month in September 2026 even as total rate-lock volume fell 2%, according to Optimal Blue’s Market Advantage report released October 13. Non-QM loans reached 12% of production, while the report’s 30-year conforming rate index climbed 67 basis points to 7.39%. Purchase activity held close to year-earlier levels; refinances weakened sharply.
What changed in September
The headline contrast was between the overall slowdown and non-QM lending. Total rate-lock volume fell 2% from August, while non-QM lock volume increased 8%. Non-QM reached 12% of September production, up 117 basis points month over month, 357 basis points over three months, and 478 basis points year over year.
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That growth did not mean the broader market expanded. Total locks were down 21% over three months and 26% year over year. Non-QM’s increasing share shows a shift in product mix within a smaller market, not a rise in all mortgage activity.
Optimal Blue says its report draws on its pricing-and-locking platform, which it says handles more than one-third of mortgages nationwide, and its hedging and loan-trading system, which it says supports approximately 40% of loans hedged and sold into the secondary market. The reported shares and changes are the company’s figures; the release does not provide row-level data or independent validation. Read Optimal Blue’s September report and release.
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Purchase held up better than refinancing
Purchase lock volume slipped less than 1% from August and was also down less than 1% year over year. Purchases accounted for 82% of September locks, although they were down 20% over the past three months.
Refinances made up 18% of production, and both major refinance categories declined:
- Cash-out refinance volume fell 8% month over month and 23% year over year.
- Rate-and-term refinance volume fell 13% month over month and 82% year over year.
The split helps explain why purchase activity could remain comparatively steady while total locks contracted: refinances, especially rate-and-term loans, were much weaker.
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Mortgage rates rose across the reported products
Optimal Blue’s OBMMI indices showed higher rates across the listed 30-year products by the end of September. These are index readings, not quotes for a particular borrower; an individual offer depends on the loan and borrower.
| Measure | September level | Change reported |
|---|---|---|
| 30-year conforming fixed-rate index | 7.39% | Up 67 basis points month over month, 93 basis points over three months, and 107 basis points year over year |
| 30-year jumbo index | 7.36% | Not stated |
| 30-year FHA index | 7.10% | Not stated |
| 30-year VA index | 7.08% | Not stated |
| 10-year Treasury yield | 5.29% | Up 54 basis points month over month and 113 basis points year over year |
The spread between the 10-year Treasury yield and the conforming 30-year rate widened 13 basis points to approximately 210 basis points. The two rates measure different instruments and should not be treated as interchangeable borrower rates.
Borrowers and lenders shifted toward different products
Non-QM was not the only segment gaining share. Adjustable-rate mortgages (ARMs) rose from 10.5% of lock volume in August to 14% in September, the highest share in Optimal Blue Market Advantage data dating back to 2019. A larger ARM share indicates a shift in the mix of loans being locked; it does not establish why each borrower or lender chose one.
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The production mix also moved away from conforming loans and toward non-conforming lending:
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- Conforming loans made up 46% of production, down 71 basis points from August.
- Non-conforming share rose 285 basis points to nearly 24%.
- FHA represented 18% and VA 11%.
Within non-QM, investor and debt-service-coverage-ratio (DSCR) loans made up 33%; bank-statement loans were 30%; and other expanded-guideline programs accounted for 37%.
Optimal Blue also reported that single-family detached homes were approximately 64% of production. Planned unit developments (PUDs) represented 28%, about one percentage point more than a year earlier; the report describes PUD share as a proxy for new-construction activity, not a direct count of new builds. Condominiums were nearly 6%.
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- CONFIDENTLY AND EASILY SOLVE: Clients' financial questions whether they're buyers, sellers, investors or renters. Increase your perceived professionalism as a new agent, experienced broker or seasoned loan officer. Close more home sales and impress your clients with fast, accurate answers to all their real estate finance questions from PITI Payments to IRR, NPV and Cashflows
- DEDICATED BUYER QUALIFYING KEYS: Enter client's income, debt and expenses to pre-qualify them to only show properties they can afford. Include tax, insurance and mortgage insurance then compare loan options and payment solutions to give your client choices before they make an offer to buy
- FIGURE OUT THE RIGHT LOAN: For your client at the press of a button for jumbo, conventional, FHA/VA, or even 80:10:10 or 80:15:5 combo loans; check to see if ARMs or bi-weekly loans, quarterly payments or if interest-only payments are the answer; giving your client more choices; easily perform what if loan or TVM calculations find loan amount, term, interest or PITI or PI payments
- BECOME AN INVALUABLE RESOURCE: To your clients by reducing their confusion and uncertainty; ensuring they are able to make a purchase offer; knowing they can afford the down payment; and determining which is the right loan for them. Date-math for listings and contracts too. Comes with a protective slide cover, quick reference guide, pocket user's guide, and long-life battery
Borrower and loan characteristics
The report’s borrower measures show differences by loan type, rather than a single profile for September buyers:
- First-time homebuyers were approximately 44% of conforming purchase locks, 70% of FHA, and 46% of VA. FHA and VA shares edged up month over month; conforming declined by roughly half a percentage point.
- Purchase debt-to-income ratios averaged 37.1% for conforming, 44.0% for FHA, and 43.8% for VA.
- Average credit score was approximately 731 across all locks. By purpose, purchase locks averaged 736, cash-out refinances 698, and rate-and-term refinances 741.
- Average loan-to-value remained just above 80%. The average locked loan amount increased more than 2% to approximately $397,000.
- Purchase pull-through fell 270 basis points month over month to 82.2%, while refinance pull-through rose 181 basis points to 74.6%.
What the report says about loan execution
The report tracks how loans were sold and hedged, details chiefly relevant to lenders and mortgage-market professionals. The highest loan-sale price tier rose 43 basis points to 78% of sales; second-tier executions gained 120 basis points to 14%; fourth-tier-or-lower executions fell 189 basis points to 5%.
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Mortgage-backed-security (MBS) execution increased 385 basis points to 47% of hedged loan sales, its highest level since January 2026. Cash execution was 29%, bulk 22%, and best efforts 2%; servicing-retained sales edged down from 57% to 56%. Best-efforts-to-mandatory spreads were flat at 26 basis points for conventional 30-year products, down 6 basis points to 10 for government 30-year products, and up 3 basis points to 41 for conventional 15-year products.
Conforming 30-year mortgage servicing rights increased one basis point to 1.39%, a 5.57 multiple, while the average OBMMI 30-year conforming rate rose 32 basis points during the month. These execution and servicing figures describe market mechanics; they are not consumer fees or additional rate quotes.
September observations versus Optimal Blue’s forecasts
Optimal Blue’s Virtual Economist forecast the conforming 30-year fixed-rate index at 7.66% one month ahead, 7.80% three months ahead, and 7.85% twelve months ahead. It also forecast the primary-secondary spread widening from 0.95% to approximately 1.06% month over month and remaining near that level over the following twelve months.
These are model forecasts published with the October 13, 2026 release, not realized rates or guarantees. Optimal Blue describes the Virtual Economist as an AI- and machine-learning-powered tool using public economic data and its proprietary lock-volume data. The release does not provide an independent validation of these forecasts.
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