Key Takeaways
- Adjustable-rate mortgages reached 17% of all mortgage rate locks in October, up from 14% in September and the highest share in Optimal Blue data going back to 2019.
- Total lock volume fell 19% from September and 38% from a year earlier, and refinances shrank to just 16% of production as rate-and-term refinance volume fell 85% year over year.
- First-time buyers accounted for 45% of conforming purchase locks and 70% of FHA locks, while FHA share rose to 20% of all production.
- The conforming 30-year rate ended October at 7.15%, down 24 basis points in the month but up 99 basis points from a year earlier, and Optimal Blue forecasts 7.30% over the next month.
Borrowers did not wait out high rates in October. They changed loan types instead.
Optimal Blue released its October 2026 Market Advantage mortgage data report on November 10, 2026. The report is built on direct lock and secondary market data, not a survey, and its pricing platform is used to price and lock more than one-third of all mortgages nationwide.
One Lock in Six Was an ARM, and That Is a Record in This Data
Adjustable-rate mortgages accounted for 17% of total lock volume in October. That was up from 14% in September and, in Optimal Blue’s words, the highest share in Market Advantage data going back to 2019.
A lock is a firmer signal than an application. It means a borrower and a lender have agreed on a rate for a specific loan, which is why this 17% reads differently from the application data in the Mortgage Bankers Association survey for the week ending October 30, where the ARM share of applications was 11.4%.
“October’s data show how much affordability is shaping the purchase market,” said Brennan O’Connell, director of data solutions at Optimal Blue. “ARM share reached another high, FHA gained share and first-time buyers took a larger share across the major agency programs.”
“For lenders, that means the opportunity is increasingly in helping borrowers find the product and payment structure that works for their circumstances,” O’Connell added.
| October 2026 mortgage locks | Result | Change |
|---|---|---|
| Total lock volume | — | Down 19% month over month, down 38% year over year |
| Purchase locks | 84% of total volume | Down 18% month over month, down 17% year over year |
| Refinance share | 16% of production | Down nearly 21 percentage points year over year |
| Rate-and-term refinance volume | — | Down 29% month over month, down 85% year over year |
| Cash-out refinance volume | — | Down 22% month over month, down 44% year over year |
| ARM share | 17% of lock volume | Up from 14% in September, highest since 2019 in this data |
| Average locked loan amount | $384,000 | Down 3% from September |
The volume underneath that shift shrank hard. Purchase locks still made up 84% of the total, but purchase volume itself fell 18% in one month.
Rates Eased Late in the Month, and Refinances Still Vanished
The Optimal Blue Mortgage Market Indices 30-year conforming fixed rate ended October at 7.15%. That was down 24 basis points during the month, up 43 basis points over three months, and up 99 basis points from a year earlier.
The other end-of-month rates show the spread borrowers were shopping inside. The 30-year jumbo rate held at 7.36%, FHA loans priced at 7.00% after falling 10 basis points, and VA loans priced at 6.76% after falling 33 basis points.
- Conforming: 46% of production, down 9 basis points in share from September and down nearly 7 percentage points from a year earlier.
- FHA: 20% of production, up 153 basis points from September and up 219 basis points from a year earlier.
- VA: 11% of production, up 29 basis points from September and down 108 basis points from a year earlier.
- Non-conforming: 22% of production, down 174 basis points from September and up more than 5 percentage points from a year earlier.
- Non-QM: 12% of production, down 24 basis points from September but up 420 basis points from a year earlier, with investor and debt service coverage ratio loans at 35% of non-QM activity and bank statement loans at 32%.
The refinance collapse is the part most readers will miss. Even with the conforming rate easing late in the month, rate-and-term refinance volume fell 85% from a year earlier, which means very few existing owners hold a loan that a refinance at today’s rates would improve.
That matters more because of what sits behind FHA borrowing. FHA share is rising at the same time FHA loans have become 47.2% of seriously late mortgages, the highest share in over 20 years, so the fastest-growing slice of new locks is also the slice with the thinnest margin for a payment shock.
On the secondary side, best-efforts-to-mandatory spreads on conventional 30-year products widened 15 basis points to 41 basis points. “The jump in best-efforts-to-mandatory spreads shows investors are paying lenders more to take on interest rate risk,” said Mike Vough, Optimal Blue’s senior vice president of corporate strategy.
First-Time Buyers Are Carrying the Purchase Market
First-time homebuyers accounted for 45% of conforming purchase locks in October. That was up 120 basis points from September and up 266 basis points from a year earlier.
The government programs are even more first-time driven. First-time buyers were 70% of FHA locks and 47% of VA locks, and VA pricing helps explain the VA slice, with VA loans also letting qualified buyers purchase with 0% down.
The borrower profile behind those locks is stretched but not reckless on paper. Purchase debt-to-income ratios were 37.1% for conforming borrowers, 44.1% for FHA borrowers, and 43.8% for VA borrowers, and the average credit score across all locks was 729.
Optimal Blue’s forward look offers no quick relief. Its Virtual Economist forecast puts the 30-year conforming rate at 7.30% over the next month and 7.39% over three months, before easing to 7.24% over the next 12 months, and the full report is available from Optimal Blue’s Market Advantage report page.
- Price the ARM reset, not the starter payment. With 17% of locks now adjustable, ask any ARM quote for its first adjustment date, its caps, and the payment at the fully indexed rate, then underwrite the deal at that higher payment.
- Do not underwrite an exit through a refinance. Rate-and-term refinance volume is down 85% year over year because today’s rates help almost no existing borrower. Buy only if the loan you lock today works on its own terms.
- Sell to the buyer who is actually locking. First-time buyers are 45% of conforming purchase locks and 70% of FHA locks. Homes that qualify cleanly for FHA financing and sit near the $384,000 average locked loan amount meet the market where it is.
- Watch the forecast path, not one week’s dip. The conforming rate ended October at 7.15% after easing 24 basis points, yet the forecast is 7.30% next month and 7.39% over three months. A late-month dip is not yet a trend.
For beginner investors, the fresh lesson is that the market is not frozen, it is re-sorting. Volume is down 38% from a year earlier, but the borrowers who remain are choosing ARMs, FHA loans, and smaller loan amounts to make the payment work.
Data source: Optimal Blue, October 2026 Market Advantage mortgage data report, released November 10, 2026 via SEND2PRESS NEWSWIRE; corroborated by Mortgage Professional America, November 10, 2026.
