Every agent I talk to right now is asking the same question.
Fair question. September was not kind to the mortgage market. But here’s what I want you to hear before anything else: rates went up, and options went up too. Both of those things are true at the same time. And the agents who understand the second half of that sentence are the ones who will keep closing deals this fall.
“Kate, what is going on with rates?”
So let’s do a quick checkup. Five things happened in the industry this week. I’ll translate each one into plain English and tell you what it means for the buyers sitting across your desk.
1. The Rate Picture: A Rough Month With a Strange Twist
Here’s the strange part. Inflation actually came in softer than expected last week. Normally, that’s good news for rates. Normally, rates drift down.
They didn’t.
The 10-year Treasury, which is the closest cousin to mortgage rates, finished September around 5.30%. That’s more than half a percent higher than where the month started. Mortgage News Daily’s 30-year fixed index is sitting around 7.60%.
Why? According to the market commentary, a lot of it was traders selling because other traders were selling. Think of it like a traffic jam with no accident. Nobody can point to the crash. Everybody just hit the brakes at once.
What it means for your buyers: Rates are reacting to mood as much as to data right now. That cuts both ways. A market that can move up fast on mood can move down fast on mood too. The next big thing to watch is the jobs report. Your buyers don’t need to predict the market. They need a lender who is watching it for them.
2. One Price Chart, Two Credit Scores
This one is big, and it’s going to keep coming up.
Fannie Mae and Freddie Mac are moving to a single pricing grid. VantageScore is joining the existing FICO Classic grid. In plain terms: a lender can use either score, and the borrower gets priced off the same chart.
For decades, FICO was the only game in town for conventional loans. This is a real shift. VantageScore is often able to score people with thinner credit files, the young buyer with one credit card and a car payment, or the service member who has been deployed and hasn’t built much history.
What it means for your buyers: More people may be able to get a usable score, and a fair price, without waiting a year to build credit. The details on how each lender rolls this out are still settling, so don’t promise anything yet. But if you have a buyer who was told “your credit is too thin,” it’s worth a fresh conversation.
3. The New Appraisal Format Got a Breather
You may have heard about UAD 3.6. It’s the new, redesigned appraisal report. The deadline for lenders to deliver appraisals in the new format was November 2nd.
Now, approved lenders can apply for a temporary exception to that deadline. This came after the Mortgage Bankers Association raised concerns that the whole appraisal world, the software, the appraisers, the review systems, wasn’t fully ready.
Here’s how I think about it. It’s like a new highway opening before all the exit signs are up. Everyone wants the new road. Nobody wants to get lost on it.
What it means for your buyers: November 2nd is less likely to be a hard wall that causes appraisal delays or surprises at the closing table. Fewer hiccups. Smoother timelines. That’s good news for everyone with a contract on the calendar.
4. Big Money Is Betting on Flexible Loans
Some people have been wondering if the boom in “non-QM” loans was starting to run out of steam. These are the loans for people who don’t fit the standard box: self-employed borrowers, investors, people who qualify with bank statements instead of tax returns.
Then New York Life’s investment arm, which manages hundreds of billions of dollars, agreed to take majority control of the company behind Verus, one of the biggest players in that space. Verus is already having its biggest year ever, with roughly $8.9 billion in loans packaged and sold to investors so far in 2026.
When an insurance giant buys in, that’s not a fad. That’s a foundation.
What it means for your buyers: The small business owner who writes off everything on their taxes. The real estate investor buying their fourth rental. The contractor whose income goes up and down every season. These folks have more paths to “yes” than they did a few years ago, and that money isn’t going anywhere.
5. The Quiet Squeeze on Smaller Loans
This one doesn’t make headlines, but it matters a lot in our market.
Investors who buy mortgages sometimes pay a little bonus for certain loans, especially smaller loan amounts. Why? Smaller loans tend to refinance less often, so investors keep collecting interest longer. In the industry, that bonus is called a “spec pay-up.”
Those bonuses have been shrinking since late August, and they kept sliding through September.
What it means for your buyers: A buyer with a smaller loan amount may see pricing get a touch worse, even on a day when the “headline rate” doesn’t move. If a quote looks different than it did two weeks ago, this could be part of the reason. It’s not anyone playing games. It’s the market behind the market.
The Deeper Lesson
Look at those five stories together. Rates got more expensive. But credit got more flexible. Appraisals got more breathing room. And flexible loan programs got a massive vote of confidence.
Technology changes. Markets change. Interest rates change. People don’t.
Your buyers still want the same thing they always have: a clear picture and someone they can trust to walk them through it. The rate is one number. The strategy is everything else.
Your Action Step This Week
Pull up the buyers you’ve parked. The ones who said “let’s wait,” or were told their credit was too thin, or are self-employed and got turned away somewhere else.
Send them my way for a fresh look. Not a sales pitch. A checkup. Some of them have more options today than they did in the spring, and they’ll remember you were the one who called.
Knowledge is power. Let’s put it to work.
Frequently Asked Questions
1. Why did mortgage rates go up when inflation came in lower?
Markets don’t always follow the textbook. In September, a lot of the movement came from technical selling, meaning traders reacting to other traders and to key price levels, rather than to the economic news itself. Good data doesn’t always win the day in the short run.
2. What does the 10-year Treasury have to do with my mortgage rate?
Mortgage rates and the 10-year Treasury tend to move in the same direction because they compete for the same kind of long-term investor. They aren’t the same number, but when the 10-year rises sharply, mortgage rates usually follow.
3. What is VantageScore?
VantageScore is a credit scoring model, like FICO, created by the three major credit bureaus. It can often generate a score for people with shorter or thinner credit histories.
4. Does the single pricing grid mean my buyer gets a better rate?
Not automatically. It means a lender can use either score and price the loan off the same chart. For some borrowers, especially those with limited credit history, that could open the door to approval or better pricing. Every file is different, so it’s worth reviewing case by case.
5. What is UAD 3.6?
It’s the updated Uniform Appraisal Dataset, a redesigned format for appraisal reports used on Fannie Mae and Freddie Mac loans. It’s meant to make appraisals more consistent and data-driven.
6. Will the appraisal deadline delay my closing?
The new temporary exception makes that less likely. Approved lenders can apply for more time past the November 2nd deadline, which helps avoid bottlenecks while appraisers and software catch up.
7. What is a non-QM loan?
A non-QM, or non-qualified mortgage, is a loan that doesn’t follow the standard Fannie Mae, Freddie Mac, FHA, or VA guidelines. Examples include bank statement loans for self-employed borrowers and DSCR loans for investors who qualify based on rental income.
8. Are non-QM loans risky?
Today’s non-QM loans are fully documented and carefully underwritten. They usually carry a higher rate than a standard loan, but they’re built for real borrowers with real income who simply don’t fit the traditional box. Large investors putting serious money behind them is a sign of how established they’ve become.
9. What is a spec pay-up, and why should I care?
It’s a bonus investors pay for certain loans they expect to hold longer, often smaller loan amounts. When those bonuses shrink, pricing on those loans can get slightly worse, even if the headline rate doesn’t change.
10. Should my buyers wait for rates to come down?
Nobody can time the market perfectly, and I won’t pretend to. The better question is whether the home and the payment make sense today. If they do, buy the right house now and keep an eye on refinance opportunities later. If they don’t, let’s build a plan so they’re ready when the timing is right.
Source: Rob Chrisman, Mortgage News Daily, October 1, 2026. Market figures reflect conditions at the time of writing and change daily. This article is for educational purposes only and is not a commitment to lend.
Kate Deiboldt, Senior Mortgage Advisor, VanDyk Mortgage Corporation
NMLS #18487 | Company NMLS #3035
Kate@VanDykMortgage.com | (931) 980-9764
Licensed in TN, KY, AL, FL, GA, TX, IL | Equal Housing Lender
Leave a Reply