Market Trends

Mortgage Broker Outlook for 2026: AI, Affordability, and Why “Honest Advice + Fast Execution” Wins

Victoria Chuidian
February 11, 2026

Key takeaways from MPA TV’s Broker Intel discussion featuring Insignia Mortgage co-founder Damon Germanides

The mortgage industry enters 2026 with a familiar mix of pressure and possibility: affordability remains strained, inventory is tight, and regulation continues to evolve. In a recent Broker Intel discussion on MPA TV, the expert panelists agreed that brokers who pair technology-driven speed with real human guidance will continue winning market share.

Insignia Mortgage co-founder Damon Germanides joined Tom Wallace (Edge Home Finance) and Andrew Russell (RCG Mortgage) to discuss the current mortgage landscape and what originators should do next. Their conversation wasn’t theoretical. It was grounded in day-to-day reality. They provided perspective on situations where borrowers can’t find homes, how pre-approvals die on the vine, and the growing gap between “getting leads” and “closing clean.”

Below are the highlights of this expert talk and its impact on borrowers, real estate partners, and anyone looking for a smarter lending strategy in 2026.

1) AI is speeding up mortgages—but it’s not replacing the originator

The panel agreed: AI is changing the operating tempo of mortgage origination.

Tom Wallace described a world where underwriting capacity expands dramatically—underwriters who used to manage 20–30 files can now handle far more, and complex income scenarios can be evaluated faster. Now, loan officers get answers quicker, while borrowers and agents get clarity sooner.

Damon echoed the value of these tools, in particular the opportunity to shorten turn times, improve responsiveness to agents, and give borrowers more immediate feedback on qualification and options. He believes the right stack can “supercharge” brokers—but only if it’s designed for how originators actually work.

Andrew Russell brought the counterweight brokers need to hear: technology is not a substitute for business development and relationships. In his words, “he or she who makes the calls wins.” Especially in the purchase business, grit, communication, and trust still decide which offers get accepted and which lenders win referral loyalty.

Overall, AI is an advantage—but only when paired with strong execution and human credibility.

2) The purchase market is still a relationship game—especially in low inventory environments

When inventory is thin, being “good” isn’t enough. Andrew framed it like this: there are fewer “pies,” so you need a bigger share of the “slices.” His team leans into proactive listing-agent outreach—positioning their buyer as strong and emphasizing speed to close.

Inventory constraints make every transaction more competitive, especially this 2026. Borrowers aren’t just shopping for rates, they’re trying to win homes. Realtors aren’t just looking for pre-approvals—they’re looking for certainty, communication, and fast problem-solving- especially when a deal gets tight.

Moreover, Damon emphasized the fact that purchase transactions continue to rely on credible, real-time human conversation. AI may help with refi automation and internal efficiency, but on purchases, the buyer and listing side still want an originator who understands nuance, can anticipate issues, and can explain the “why” behind the numbers. In a tight market, brokers win by delivering confidence, speed, clarity, and expertise.

3) The biggest headwinds: affordability and inventory (and they’re hitting even high earners)

Damon’s commentary on affordability was one of the sharpest moments in the discussion—because it didn’t romanticize the market.

Insignia Mortgage operates heavily in major metros (including California), and Damon described a growing trend: pre-approvals that fall apart not because credit fails, but because reality strikes. Even when financing is possible, borrowers reach a point where the monthly stress becomes defeating.

He highlighted a dynamic that many high-income buyers experience in expensive markets: even households earning what most would consider “top-tier” incomes can still struggle to purchase a home without taking on a payment that consumes an uncomfortable share of their monthly cash flow.

What stood out most wasn’t just the market observation;it was the philosophy behind it:

Sometimes the best advice isn’t “yes.” It’s helping the borrower decide whether the deal actually makes sense for their life.

That’s a key element of Insignia’s positioning: complex lending is not just about approvals—it’s about advising intelligently when leverage and affordability collide. Affordability pressure isn’t just a loan problem—it’s a decision-quality problem. Great brokers help clients think clearly.

4) Broker retention is an underused growth lever (and a major industry weakness)

Tom Wallace made a strong point that many brokerages don’t want to confront: retention in the broker channel is low compared to other lending models.

His argument was not about blaming originators—it was strategic: if brokers could materially improve retention through better systems and outreach, they would create a major advantage, especially when market volume is harder to come by.

Damon’s earlier comments connect directly to this: the broker who is honest, consistent, and easy to work with becomes the person borrowers come back to—sometimes after another lender fails to deliver. Retention isn’t accidental. It’s built through process, communication, and trust—especially when the first deal is complex.

5) Damon’s “wake-up call” strategy: diversify lender relationships and expand solutions

Damon outlined one of the biggest shifts in how he’s run Insignia over the past few years… When rate changes happened quickly, Insignia’s strong relationships with smaller banks and credit unions became a vulnerability—those institutions pulled back or hit capacity limits. That created a “double whammy” with rising rates and reduced lender availability.

Insignia’s response wasn’t panic. It was strategy. 

  • They diversified capital sources and products so that business isn’t dependent on a narrow lender set.
  • They expanded into complementary solutions—Damon referenced building Insignia Capital Corp. as a bridge-lending platform to support developers and builders, while also creating a longer client lifecycle (bridge now, permanent financing later when stabilized).

Flexibility and innovation is key to success. The modern broker wins by being a solutions platform, not a single-lane lender.

6) Tech adoption must match the LO, not the other way around

Technology is only valuable if it becomes behavior, and behavior only changes when tools are intuitive. This was a very “real-world” point, and it matters for any growth-minded brokerage.

Damon noted that many successful originators are not technologists—and if the system is too complicated, it won’t be used. The goal is not “more tools.” The goal is better visibility and easier daily execution: dashboards, analytics, referral-source clarity, and action prompts that help LOs know where to focus.

7) 2026 outlook: don’t wait for rates to save you—build like it’s still hard

Overall, everyone agreed that 2026 will reward brokers who combine modern outreach with old-school competence.

Damon’s 2026 forecast summary:

  • He’s not assuming rates will be a tailwind.
  • If they improve, great—but brokers should prepare as if they won’t.
  • The brokers who commit through challenging conditions build their reputations, develop niches, and “plant seeds” that pay off later.

Andrew’s 2026 perspective summarized as a two-part operating system:

  1. What you do when the phone rings (process, execution, tech, follow-through)
  2. What you do to make the phone ring (marketing, business development, relationships, education content)

Tom’s 2026 forecast:

Tom shared his belief that the 2026 broker is competing in a world where social and digital education matter more than traditional media. He emphasized that the originators who can teach clearly will win attention and trust at scale.

What does this mean for borrowers and partners working with Insignia Mortgage?

If you’re a borrower, investor, or real estate partner navigating 2026, the MPA TV discussion reinforces what Insignia Mortgage is built for:

  • Complex files that require real underwriting intelligence
  • Speed and execution when timelines are tight
  • Honest guidance when affordability and leverage need to be balanced
  • Creative lending options, including jumbo, non-agency strategies, and bridge-to-perm pathways
  • A team led by professionals who understand that mortgage decisions are not just transactions—they’re long-term financial commitments

Damon’s approach to lending leadership is clear: use technology to move faster, but never replace the human expertise that wins purchases and builds trust. In a market where many deals die from uncertainty, that combination is exactly what clients and partners need.

If you’re planning a purchase, refinance, investment, or construction-related financing strategy in 2026, connect with the Insignia Mortgage team and explore options designed around your real-world scenario—not a one-size-fits-all box. Connect with our team today by clicking here.

References:

Germanides, Damon. “Experts give their thoughts on navigating challenges to find success in 2026.” Mortgage Professional America, Jan. 7, 2026. (Mortgage Professional)

“Damon Germanides.” Mortgage Professional America (Broker Intel profile). Accessed Jan. 8, 2026. (Mortgage Professional)

Success Stories

Top Funded Loans of 2025—and Why 2026 Will Be Even Bigger

Victoria Chuidian
January 7, 2026

2025 was a defining year for the Insignia Mortgage team, with a total loan volume of $415M closed. Across super jumbo purchases, high-LTV refinances, time-sensitive investment acquisitions, and complex borrower profiles, our team consistently delivered outcomes that many lenders considered impossible.

From borrowers putting just 20% down on super jumbo loans, to first-time U.S. earners qualifying without FICO scores or tax returns, to 21-day closes on investment properties—Insignia Mortgage proved why we are trusted for complex, high-stakes financing. Below is a look at our most impactful funded loans of 2025, capped by our December case study—and what this momentum means for clients heading into 2026.

Top Funded Loans of 2025: A Year of Complex Wins

$8.395M Super Jumbo Loan at 80% LTV – Los Angeles, CA

Borrower Need: A high-income client purchasing a primary residence wanted to limit their down payment to 20%—a major challenge in the super jumbo space.
Insignia Solution: Damon Germanides sourced the only lender willing to offer 80% LTV on a super jumbo loan, paired with a competitive 7/1 ARM at 5.41% (5.63% APR).
Result: The borrower secured their home with the leverage they wanted—without sacrificing pricing or structure.

$3.45M New U.S. Income Jumbo Loan – Los Angeles, CA

Borrower Need: A client new to the U.S. with no FICO score or tax returns needed jumbo financing—fast.
Insignia Solution: Damon Germanides and Neil Patel identified a lender willing to qualify the borrower using newly established U.S. income, offering rates comparable to domestic borrowers.
Result: The loan closed in under 30 days, removing a major barrier for international and relocating buyers.

$3.5M Refinance Using New Bonus Income – Los Angeles

A borrower facing an ARM adjustment had recently started a new role with compensation heavily weighted toward bonuses. Insignia structured a refinance using the new bonus income, stabilizing the loan and future cash flow.

$2.75M No-Income-Verification Purchase – Santa Barbara

Without selling an existing residence or providing income documentation, this borrower still needed to purchase a new home. Insignia sourced a bank that required no tax returns and no income verification, enabling a smooth closing.

$7.5M Investment Property Closed in 21 Days – Los Angeles

In the middle of a 1031 Exchange, timing was everything. Insignia matched the borrower with a lender that understood complex income and moved quickly—closing in just 21 days so the deal could move forward.

$8M High-LTV Jumbo Loan at 80% – Los Angeles

When a client needed maximum leverage on a jumbo purchase, Insignia delivered 80% financing with an interest-only ARM—closed in under 30 days despite tight underwriting requirements.

$2M Apartment Loan with Fast Close – Glendale

After inspections were complete, the borrower needed to close on a multifamily property in under 30 days. Insignia delivered both speed and pricing, securing the deal on time.

$1.565M 8-Unit Permanent Cash-Out Refinance – Los Angeles

Following a bridge loan used to renovate and stabilize an 8-unit property, Insignia Mortgage stepped in to secure permanent financing. The loan closed in 45 days, paid off bridge debt, and delivered additional cash-out proceeds with a flexible prepay structure.

$1.242M Agency Conforming Investment Purchase – Los Angeles

After being turned down by three banks due to debt-ratio concerns, Insignia underwriters re-evaluated business and personal returns—closing the deal five days before COE and keeping ratios within agency guidelines.

Why 2026 Is the Best Time to Work with Insignia Mortgage

The results of 2025 weren’t accidental—they were built on deep lender relationships, elite underwriting expertise, and a relentless focus on borrower strategy. As we move into 2026, Insignia Mortgage is expanding access to:

  • Higher-LTV jumbo and super jumbo solutions
  • Foreign national and new-to-U.S. income programs
  • No-income and asset-based lending
  • Accelerated closings for competitive purchases
  • Creative structures for investors, 1031 exchanges, and multifamily assets

Whether you’re purchasing a luxury primary residence, refinancing a complex portfolio, or racing the clock on an investment opportunity, Insignia Mortgage is positioned to deliver smarter structures—and better outcomes—in 2026 and beyond. Connect with our team today by calling 310-730-1469 or check out current loan program rates here.

Success Stories

How Insignia Mortgage Continues Delivering Solutions for Complex Borrower Scenarios Q3 2025

Victoria Chuidian
November 20, 2025

Recent Loan Successes: How Insignia Mortgage Continues Delivering Solutions for Complex Borrower Scenarios

At Insignia Mortgage, we specialize in navigating the most challenging real estate finance situations—from high-LTV jumbo purchases to no-income loans, interest-only structures, and sophisticated investment transactions. Our boutique lending approach, deep lender network, and decades of jumbo and non-QM expertise allow us to deliver fast, flexible, and highly customized financing solutions for clients nationwide.

Below is a highlight of recent loan successes across California and Florida that demonstrate the Insignia difference.

Sherman Oaks, CA — High-LTV Interest-Only Purchase

Loan Amount: $4.175M
Program: 7/6 ARM — Interest Only
LTV: 79%
Rate: 5.50% / 5.63% APR
Timeline: < 3.5 weeks

Challenge:
A borrower seeking high-LTV, interest-only financing approached Insignia after struggling to find a lender willing to meet their requirements.

Solution:
Our team quickly matched the client with a lender offering a competitive interest-only loan at an exceptional rate. The transaction was completed in under 3.5 weeks—ensuring the buyer closed on time and secured the home they wanted.

Orlando, FL — No-Income Loan for Borrower in Transition

Loan Amount: $760K
Program: 30-Year Fixed
LTV: 80%
Rate: 6.75% / 6.88% APR

Challenge:
The borrower had no documented income and was in the middle of a divorce, making traditional loan approvals nearly impossible.

Solution:
Insignia sourced a lender able to rely on the borrower’s balance sheet—rather than income—to structure an approval. The client closed successfully with a long-term fixed rate solution tailored to their unique financial situation.

Los Angeles, CA — 21-Day Close for 1031 Exchange Investment Property

Loan Amount: $7.5M
Program: 5/1 ARM
LTV: 50%
Rate: 6.37% / 6.30% APR
Timeline: 21 days

Challenge:
A real estate investor needed to close quickly to complete a 1031 Exchange, leaving no room for delays and requiring a lender who understood complex income.

Solution:
Insignia secured a lender offering both speed and competitive pricing. The deal was funded in just 21 days—preserving the client’s exchange timeline and investment strategy.

Los Angeles, CA — High Debt-to-Income Borrower Secures Great Rate

Loan Amount: $1.44M
Program: 5/1 ARM
LTV: 80%
Rate: 5.50% / 5.63% APR

Challenge:
The borrower had a high DTI and had already been turned down by several banks.

Solution:
Insignia partnered the borrower with a local bank comfortable with their full financial picture, including strong assets. The borrower received an excellent rate and was able to vest the property in an LLC.

Woodland Hills, CA — Big Bank Turn-Down Turned Fast Approval

Loan Amount: $2.5M
Program: 30-Year Fixed
LTV: 80%
Rate: 6.00% / 6.13% APR
Timeline: < 30 days

Challenge:
After being rejected by a major bank, the borrower needed a solution quickly to keep their purchase on track.

Solution:
Insignia connected the borrower with a local credit union that understood their unique business structure. The loan was approved with optimal terms and closed in under 30 days.

Montecito, CA — $9.5M Interest-Only Take-Out of Construction Loan

Loan Amount: $9.5M
Program: 5/6 ARM — Interest Only
Use: Construction take-out
Rate: 5.50% / 5.80% APR

Challenge:
The borrower needed an interest-only solution to refinance a construction loan on a property still in development.

Solution:
Insignia arranged financing through a local private bank offering excellent pricing and fast execution. The client secured long-term flexibility with a smooth, timely close.

Why Borrowers Choose Insignia Mortgage

Across every scenario—no income, complex tax returns, high DTI, fast-close deadlines, or jumbo loan requirements—Insignia Mortgage delivers:

  • Access to portfolio lenders, private banks, and niche programs unavailable through traditional channels
  • Fast turn times, even on complex transactions
  • Customized structuring for foreign nationals, LLC ownership, interest-only needs, and high-net-worth borrowers
  • Competitive rates on jumbo, non-QM, and specialty loan products

If you have a financing scenario other lenders can’t solve, our team is here to help.

📞 Connect with Insignia Mortgage
Call us today at 310-730-1469 to speak with our experienced loan specialists and explore portfolio, jumbo, and non-QM lending options tailored to your needs.

Market Trends

Market Commentary 09/19/2025

damon Damon Germanides
September 19, 2025

As expected, the Fed lowered rates by 0.25% this week — a move well broadcast by the markets and reflected in the recent drop in both Treasury and mortgage rates. In addition to the movement in rates, what stood out most was the Fed’s accompanying commentary and economic projections. Interestingly, they’re now forecasting slightly higher inflation, steady employment, and modest GDP growth. With that outlook, one might wonder whether a rate cut was even necessary. Still, the Fed made its move, sparking renewed debate about what comes next.

Although some analysts are calling for as many as five rate cuts over the next year, we’re not convinced. Our base case is for two cuts, maybe a third — but that’s far from certain. Inflation remains sticky, and while the labor market isn’t booming, it’s holding up reasonably well. Despite a slowing economy, it’s important to consider the potential impact of Trump-era economic policies, which are just beginning to roll back in and could provide a tailwind in the coming quarters.

One curious development following the Fed announcement was the behavior of the 10-year Treasury. It briefly dipped below 4%, but has since climbed and now sits around 4.12%. This uptick reflects a growing concern among bond pros: when the Fed cuts short-term rates, longer-term yields don’t always follow — and in some cases, they move higher. A large amount of supply is hitting the bond market, with hundreds of billions in Treasuries coming due that need to be refinanced. Add in persistent fiscal deficits and inflation still tracking above target, and you’ve got a recipe for upward pressure on long-term rates.

What This Means for Borrowers

The good news is that lower short-term rates are already providing relief for borrowers with floating-rate loans, HELOCs, or bridge financing tied to short-term benchmarks. For borrowers seeking long-term fixed-rate solutions, the outcome depends on where the 10-year Treasury settles.

For now, we believe the majority of the rate drop has already been priced in. We don’t foresee significantly lower rates from here. That said, public awareness of this move is growing. As expected, our phones have been lighting up with calls for pre-approvals and refinance requests.

Press

Insignia Mortgage Co-Founder Damon Germanides Featured in MPA Magazine

Victoria Chuidian
September 9, 2025

Industry Insights on Today’s Housing Market and Creative Lending Solutions

We’re excited to announce that Damon Germanides, co-founder of Insignia Mortgage, was recently featured in Mortgage Professional America (MPA) Magazine — one of the most respected publications in the mortgage and real estate finance industry.

In his interview, Damon shares candid insights on today’s “illiquid” housing market, the impact of historically low rates, and why brokers must lead with honesty when advising clients. He also highlights how creative loan solutions, including bridge financing through Insignia Capital Corp, are helping borrowers and brokers navigate this challenging environment.

Key Takeaways from Damon’s MPA Interview

  • Why waiting for 2% mortgage rates isn’t realistic
    Damon explains that the era of ultra-low rates is over and that buyers waiting for them to return may be on the sidelines indefinitely.
  • The challenges of an illiquid housing market
    From seniors staying put to first-time buyers unable to move up, Damon outlines why housing supply remains tight and mobility limited.
  • Why honesty matters in mortgage advising
    Instead of telling clients “it’s always a great time to buy,” Damon emphasizes the importance of being transparent about market realities — a key to building trust.
  • Bridge financing as a solution
    With traditional banks pulling back, Damon discusses how Insignia Capital Corp is providing flexible bridge loans to help clients unlock equity and move forward with confidence.

Why This Feature Matters

Damon’s inclusion in MPA Magazine reinforces Insignia Mortgage’s reputation as a trusted leader in complex lending. With over a decade of experience funding non-QM loans, jumbo financing, and creative real estate solutions, Insignia continues to be a go-to resource for borrowers, real estate agents, and investors navigating California’s luxury markets.

Read the Full Interview

You can read Damon’s full feature here: How Honest Rate Advice Motivates Buyers in an Illiquid Market (Mortgage Professional America).

Market Trends

Market Commentary 09/05/2025

damon Damon Germanides
September 5, 2025

A softer-than-expected August Jobs Report pushed equity prices and bond yields lower last week. While consensus estimated 77,000 new jobs, the actual number came in at just 22,000. These results provide further evidence that the U.S. employment picture is weakening. We’re seeing firms across sectors slow or even freeze hiring as macroeconomic uncertainty builds.

Weakening Jobs Data Has Fed On Track For Rate Cuts

This jobs data brings the Fed’s dual mandate—price stability and full employment—into sharp focus. With inflation still above target and employment softening, the central bank faces a difficult decision: cut rates now to support labor markets, or hold steady to avoid reaccelerating price growth. One complicating factor is the impact of new tariffs, which have increased input costs for wholesalers but have yet to be passed on to consumers. If these costs begin to flow downstream, renewed inflationary pressure could be inevitable.

All signs currently point to a 25-basis-point rate cut at this month’s Fed meeting. Nonetheless, markets remain on edge. Key upcoming data, including the PPI and CPI reports, could shift the calculus. If wholesalers start to pass along costs as inventory cycles out, consumer pricing could suffer just as rate relief is being considered.

What Does This Mean for Borrowers and Real Estate Professionals?

Short-term rates have already fallen by more than 50 basis points across the front end of the curve, providing meaningful relief for borrowers with floating-rate mortgages or upcoming loan resets. This drop also benefits those pursuing bridge or construction financing, as pricing on short-term debt tends to track closely with Treasury yields.

On the long end of the curve, the 10-Year Treasury has dipped into the low 4% range, which supports lower rates for both conforming and jumbo fixed-rate mortgages. Although we’re unlikely to revisit pre-COVID rate levels, the market is beginning to price 30-year fixed loans in the 5.50% range and ARM products between 4.75% and 5.00%. The current rate movement represents a significant psychological shift for buyers initially sidelined by high rates.

Brokers Are Back –Why Are They Playing a Critical Role Now?

Bank underwriting remains tight, and many institutions are allocating capital toward other, more profitable business lines. This has created a surge in demand for non-QM (non-qualified mortgage) loans—products that offer flexibility for self-employed borrowers, real estate investors, foreign nationals, and other non-traditional profiles.

Unlike agency loans, most non-QM products must be originated through a licensed mortgage broker. At Insignia Mortgage, this is where we shine. Our “Individualized Lending” approach pairs borrowers with the right lender from our deep network of credit unions, private banks, and institutional partners. Whether it’s no-tax-return jumbo loans, interest-only structures, or construction and bridge financing, we help navigate financial complexity and get deals funded.

As rates shift and the credit landscape evolves, we believe now is a moment of opportunity. If you’re one of the advisors, realtors, or developers working with borrowers who don’t fit inside the traditional lending box, let’s connect asap. The Insignia Mortgage team has over a decade of success with closing non-QM loans. 

Market Trends

Market Commentary 08/15/25

damon Damon Germanides
August 15, 2025

Mortgage Rates Ease As Fed Weighs Rate Cut

This week kicked off with better-than-expected consumer inflation data, sparking optimism that the Federal Reserve might cut rates in September. In some cases, this rate cut could be as much as 50 basis points. However, Thursday’s PPI (Producer Price Index) report painted a more complicated picture. The data showed wholesalers absorbing much of the inflation in goods, indicating that some costs have yet to be passed on to consumers. If those higher wholesale prices begin to filter through, future CPI readings could rise, making it harder for the Fed to justify aggressive rate cuts.

That said, given July’s weak jobs report, if the Fed is forced to choose between slightly higher inflation and easing financial conditions to support a slowing economy, our bet is they will cut rates to boost economic activity. The two-year Treasury yield has fallen to 3.75%, helping push many adjustable-rate mortgage products below 5.5%. In the jumbo space, we are now seeing rates under 6%, prompting renewed interest from borrowers. Nonetheless, with longer-dated Treasuries still near 5%, 30-year fixed money remains expensive at over 6%.

The current landscape is undeniably complex. Financial conditions don’t appear overly restrictive—IPOs are rolling out, Bitcoin and speculative trading are hot, equity indexes are at all-time highs, and credit spreads remain tight. Under normal circumstances, these would not be conditions for a Fed rate cut. But we live in unusual times. Political pressure to cut rates, coupled with the appointment of another dovish Fed governor, could put the central bank in a position where it cuts once, and likely twice, before year-end to fend off critics. If inflation reaccelerates more than expected in the coming months, those cuts could backfire. This is no easy time to be in the money game.

These are the opinions of the author. For financial advice, please talk to your CPA or financial professional.

Market Trends

Market Commentary 08/01/2025

damon Damon Germanides
August 1, 2025

Market Rally Hits A Speed Bump

Markets rallied through Thursday this week. Financial conditions felt loose, whether it was a high-flying IPO, a tight-spread bond trade, or a huge day-trade bet, with plenty of risk-taking across asset classes. The Fed, for its part, held rates steady, choosing patience as it waits for a clearer signal from inflation or jobs data before making its next policy move.

Friday’s jobs report delivered a jolt. The numbers came in sharply below expectations, rattling confidence and pushing investors to rethink the “all-clear” narrative. Adding fuel to the uncertainty, Trump’s latest tariff announcement landed the same day, further muddying the outlook for growth and trade.

We expect to see some better pricing on mortgages across the yield curve following the sharp drop in yields, after the jobs report. That said, the overall economy still appears resilient; consumer confidence is rebounding, corporate balance sheets remain healthy, and despite frustration over the cost of living, consumers continue to spend. With that backdrop, the recent rate dip may prove short-lived if the data turns stronger in the coming weeks.

The odds of a Fed rate cut in September are back on the table after Friday’s dismal jobs numbers. Wednesday’s Fed meeting had market participants thinking a rate cut was unlikely.  With inflation still trending above the Fed’s 2% target, will the Fed flinch and lower interest rates out of fear of a slowing economy, or hold steady given that inflation is still elevated? Also, even if the Fed lowers short-term rates, how will the year 10 Treasury react? We will know much more in the coming weeks.

While much of the U.S. economy is service-driven and less sensitive to higher rates, housing and commercial real estate remain directly impacted. The 10-year Treasury continues to be elevated relative to pre-pandemic norms, keeping mortgage and construction financing expensive and weighing on both consumers and investors. Limited housing supply—especially in major markets with little new construction underway—continues to challenge affordability and transaction activity.

Uncategorized

Market Commentary 07/11/2025

damon Damon Germanides
July 12, 2025

Market Moves Defy Headlines: What It Means for Mortgage Rates

While it’s been a few weeks since our last market update, recent movements in rates and equities might imply that everything has been business as usual. However, considering events like the precision bombing of Iranian nuclear facilities, fears of sleeper cell retaliation, the ongoing Russia-Ukraine conflict, and President Trump’s unconventional tariff negotiations, we would have expected lower rates and lower equities—not the opposite. Markets, nonetheless, have a remarkable way of looking past negative headlines and focusing on the future (at least most of the time).

Interest rates are drifting higher as tariff threats escalate. Companies without pricing power are currently absorbing increased costs, potentially pressuring earnings later in the year. Tariff negotiations are far from over, and it will be interesting to see how the bond market digests the potential for rising tariffs, slowing earnings, and higher unemployment.

Meanwhile, the White House has made no secret of its dissatisfaction with Fed Chair Powell. While we’re always in favor of lower rates, we don’t expect a dramatic 300-basis-point cut to the Fed Funds Rate. Our base case calls for one or two cuts, with the Fed Funds Rate settling around 4% and inflation climbing to roughly 3%. That being said, banks, alternative lenders, and private credit shops are beginning to lower note rates on high-quality loan scenarios. Here are a few recent quotes:

  • Luxury SFR purchase (30% down): 5/6 ARM at 5.25%
  • Luxury SFR cash-out refi (boutique bank): 7/6 ARM at 5.60%
  • Bridge loan (purchase, moderate leverage): 18-month interest-only at 8.99%
  • Community-focused program (underserved market): 30-year fixed at 5.70%
  • 10-unit apartment building (regional bank): 5/6 ARM at 5.85%

On the housing front, the growing stress is apparent as inventory remains low and buyers remain hesitant, facing a double-whammy of elevated home prices and interest rates. Still, markets like Austin, TX and South Miami, FL show meaningful price corrections as more inventory becomes available. This is a trend we expect to continue nationally.

Los Angeles has slowed, but activity remains strong in more affordable submarkets, where well-priced homes are attracting multiple offers. Refinance activity has picked up as many borrowers’ ARMs from the 2020 low-rate cycle begin to reset. This could result in additional inventory as some homeowners, now facing much higher payments, consider selling—especially with today’s higher cost of living. We’re keeping a close eye on oil prices, the 10-year Treasury yield, and bank earnings as key signals for where the broader economy is headed. This remains a very tough market to handicap.

qr-code-census-track-1
Market Trends

Check Property Eligibility with Census Data

Support
June 29, 2025

How to confirm if a property is eligible for the program:

  1. First, click this link to open a new page with the census code geomap. See the screenshot below. (https://geomap.ffiec.gov/FFIECGeocMap/GeocodeMap1.aspx)
  2. Set the Year to 2024 or 2025 if available.
  3. Input the address on the top line and select the correct property.
  4. Once the address shows up, click on Census Demographic Data
    If the Tract Minority % is over 50 then the property is eligible.

These are the opinions of the author. For financial advice, please talk to your CPA or financial professional.