“The hardness of the butter is proportional to the softness of the bread.” Proportionality is important, whether in a restaurant or in a lender watching adjustable-rate loans (where the market favors credit unions and banks). With short-term rates dropping relative to long-term rates, the adjustable-rate mortgage market share has increased. Lenders that I have spoken with (mostly bank and credit union folks) say that the vast majority of ARM applications are 5-year, 7-year, and 10-year products, which, for anyone who’s been in the business for 25 years, is a shift from the mid-2000s when we had various types of 1-year ARMs, along with 3/1 and 5/1 products. For potential borrowers who have watched their landlords change rental rates, it may seem like their monthly payments are adjustable. But unfortunately for lenders, renting is cheaper than buying in 49 out of 50 MSAs with an average savings of $908 a month. Pittsburgh was the only MSA where buying is cheaper. The worst MSA? Austin, where it costs $1,467 to rent a starter home and $3,150 to buy one. More evidence of an unaffordable housing market: the homeownership rate has fallen to the lowest level since 2019. The drop affected all age groups, with the 45-54 age group seeing the largest percentage decline. (Today’s podcast can be found here and this week’s is sponsored by Arrive Home. Arrive Home helps mortgage lenders connect creditworthy buyers with down payment assistance and affordable homeownership solutions, offering tools that empower lenders and uplift communities. Hear an interview with MBA’s David Upbin and Arch MI’s Kevin Popoli on the Mortgage Banking Bound program and how it is preparing college students for careers in mortgage banking.)

Products, Services, and Tools for Lenders and Brokers

Have borrowers been held back by high DTI, low down payment, or locked-up equity? With Flyhomes Buy Before You Sell, you can help them: Buy with $0 down. Make stronger, cash-like offers. Unlock equity upfront with no monthly payments. Reduce DTI & qualify for up to 50% more. You stay the broker of record; we make the financing work. Over the past 10 years, Flyhomes has helped 5,000+ buyers move into their next home. On average, LOs close 1.2 more loans per month with Buy Before You Sell, now available in 30+ states. Try the loan calculator today and see how Flyhomes can boost your borrower’s buying power.

Unlock the latest insights on the future of home equity lending! Join FirstClose on Wednesday, September 10, at 1:00 PM CT (2:00 PM ET) for an exclusive webinar featuring Jonathan Penniman, Associate Director, Systems and Analytics, Research and Economics at the MBA. Jonathan will walk through findings from the Mortgage Bankers Association’s new Home Equity Lending Study, offering a data-driven look at today’s market dynamics and what lenders need to know to stay competitive. From borrower trends to operational strategies, this session will deliver a valuable perspective on where home equity lending is headed next. Reserve your spot today!

Make Your Mark on Mortgage Lending With MeridianLink! Heading to ACUMA 2025? Stop by Kiosk #27 and see how MeridianLink® Mortgage enhances your lending processes. With customizable workflows, automated underwriting, a native pricing engine, omnichannel experiences, integrated consumer and deposit applications, and more: it’s the mortgage lending technology built to power your future. Book a one-on-one with our team and discover why more lenders are choosing MeridianLink Mortgage to lead their mortgage business forward.

Event Management Made Simple with VirtualVerify® Tired of juggling marketing requests, invoices, attendee lists, and forms across multiple systems? VirtualVerify® consolidates your entire event workflow into one cloud-based suite: mobile-friendly requests, customizable forms, photo and document capture, automated post-event follow-ups, and filters for audit-ready reporting. Streamline operations, reduce risk, and cut costs. Try VirtualVerify today!

The Chrisman Marketplace is a centralized hub for vendors and service providers across the mortgage industry to be viewed by lenders in a very cost-effective manner. We’re adding new providers daily, so check back often to see what’s new. To reserve your place or learn more, contact us at info@chrismancommentary.com.

Industry Events

With the third quarter of 2025 well underway, now is the perfect time to revisit your Loan Officer Compensation (LO Comp) strategy and ensure you’re prepared for what’s ahead. BRODY | GAPP LLP invites you to attend its upcoming complimentary webinar, September 9, 2025 at 10:00 AM PST., where Ron Gapp and James Brody will explore the latest regulatory developments, compliance risks, and strategic opportunities in LO compensation.

STRATMOR Group’s Consumer Direct Workshop is back, live in Charlotte, NC, November 5–6, 2025. Designed specifically for lending executives in the Consumer Direct channel, this workshop goes beyond theory with peer-to-peer discussions, benchmarking, and practical strategies you can implement right away. Learn from peers and STRATMOR experts about what’s working now in sales execution, comp structures, marketing channel allocation, technology adoption, and more. The format is interactive, candid, and collaborative, a rare opportunity to learn directly from industry peers and STRATMOR experts. Registration is open now, and seats are limited. Learn more and secure your spot here.

September 7 through the 10th, in Boise, Idaho, is the Pacific Northwest Mortgage conference. Hear from the MBA Chairperson Laura Escobar, forward thinker Kristin Messerli, Guild’s David Battany, Robbie and Rob Chrisman, and other top-notch speakers about our industry and where we’re going.

Join MBA's Legislative and Political Affairs Team during the next Mortgage Action Alliance (MAA) Quarterly Webinar on Wednesday, September 10, from 3:00-4:00 PM ET to discuss the remaining agenda for Congress in 2025 and beyond. With both the House and the Senate scheduled to return to Washington for three work weeks on September 2, Congress will likely have a busy month, with various policy issues and budget matters on the agenda, including avoiding a government shutdown. Register now for this can't-miss virtual event!

September 11-12 there’s the Mortgage Bankers Association of Mississippi Fall Conference in Jackson. Check out “Success Through Synergy!”

If you’re near New York, check out the annual NYMBA’s convention 9/15-9/17.

Registration is officially open for ACUMA’s 2025 Make Your Mark Annual Conference! Join credit union lending professionals and industry leaders from across the country September 21–24 in Denver, Colorado, for one of the year's most impactful credit union mortgage events. This year’s conference promises dynamic speakers, timely insights, hands-on learning, and powerful networking opportunities. Whether you're returning or attending for the first time, this is your chance to make connections that matter and be part of shaping the future of credit union mortgage lending.

“The 2025 Loan Vision Innovation Conference is where mortgage finance leaders come to connect, learn, and innovate. Join us in Atlanta, GA, from September 22-24 for three days of expert-led sessions, real-world strategies, and networking with the best in the industry. From cutting-edge technology to efficiency-boosting insights, LVIC25 is designed to help you drive profitability and stay ahead of the curve. Don’t miss your chance to be part of the premier event for mortgage banking professionals! Register now! Rob Chrisman is back on the main stage at the 2025 Loan Vision Innovation Conference! Connect with top lenders and financial leaders shaping the future. Register now!”

Join Idaho Mortgage Lenders Association on Tuesday, September 9th | 1:00pm - 5:00pm at the Grove Hotel for a Special Event - Originator Super Session. Speakers include Mr. Thank You, John Israel, Top Realtor Panel, National Reverse Mortgage Lenders Assoc., and Generational Lending with Kristin Messerli.

Don’t miss MBA of Florida Loan Officer Summit on Thursday, September 18, 2025 in Jacksonville, FL. This dynamic half-day workshop featuring keynote speakers, engaging panel discussions, lunch, and valuable networking. Walk away with actionable strategies you can put into practice immediately to grow your business.

The Chrisman Commentary is pleased to bring you a variety of video shows hosted on Zoom throughout the week. Take your pick: We have a show focused on technology and innovation (Now Next Later Mondays at 1pm ET), origination (Mortgage Pros Tuesdays at 2pm ET), big-name interviews (Mortgage Matters Wednesdays at 2pm ET, presented by Lenders One), headline news (The Big Picture Thursday’s at 3pm ET), opinion (Last Word Fridays at 1pm ET), advisory services (Advisory Angle first Tuesday of the month at 2pm ET, presented by STRATMOR Group), capital markets (Capital Markets Wrap second Tuesday of the month at 3pm ET, presented by Polly), mortgage legal issues (Mortgage Law Today third Tuesday of the month at 3pm ET), and reaching the next generation of homeowners (Mortgages with Millennials last Tuesday of the month at 1pm ET, presented by The Mortgage Collaborative). (If you don’t see a presenting sponsor, please reach out to Chrisman LLC’s Anjelica Nixt to inquire about opportunities.)

The True Cost of Insurance

In 2025, the national average cost of homeowners insurance rose to $2,470 annually, or about $206 per month, representing a 9 percent increase over the past two years. However, the true cost of home insurance varies significantly by location when measured as a percentage of median income. Louisiana has the highest true cost, with residents spending 10.8 percent of their income on average premiums of $6,274, followed by Nebraska and Florida. These states face high risks from extreme weather, like hurricanes and tornadoes, which drive up premiums. Conversely, Vermont offers the most affordable true cost, with homeowners paying just 1.03 percent of their income on premiums averaging $834. Major metro areas like New Orleans and Miami are especially burdened, with New Orleans residents spending up to 17.5 percent of their income on insurance, largely due to low median income and high storm exposure.

Several key factors impact home insurance pricing beyond location, including claim history, deductible amount, and (most significantly!) credit score. In most states, a drop in credit score increases premiums more than filing a claim, with rates jumping by over 60 percent in some areas. For instance, homeowners in Nebraska can see their premium rise by more than $6,000 due to a credit score drop. Weather-related events continue to escalate costs across the board; from wildfires in California and Colorado to hurricane threats in Florida and Louisiana, insurers are either raising premiums or withdrawing from high-risk regions entirely. While Florida’s rates are starting to decline due to recent legislative changes, states like Louisiana and Colorado are still seeing significant annual increases. Separate FAIR Plans, state-backed insurance alternatives, are becoming more common in states facing insurer withdrawals, often offering more limited coverage at higher costs.

Capital Markets

The yield curve twisted flatter on Thursday, a move inconsistent with recent trends, but consistent with softer labor data and eased concerns over central bank independence. While efforts to remove Fed Governor Cook are seen by many as a strategy to assert greater influence over future Fed policy (historically, erosion of central bank autonomy has been linked to higher inflation and diminished investor confidence, factors that could shift global capital flows and risk sentiment), it hasn’t significantly altered 2025 rate cut expectations, which remain anchored around 54 basis points, in line with the June SEP. However, the market has begun to price in a more dovish outlook for 2026. Fed funds futures imply two rate cuts before year-end, the first next month and a second cut in December. New York Fed President Williams this week downplayed slowing payrolls in favor of the steady unemployment rate, framing labor market strength not through job creation but through stability in joblessness, especially amid declining immigration and reduced labor supply.

We saw yesterday that initial jobless claims this week fell slightly to 229k, countering recessionary fears and signaling that, while cooling, the labor market is (fortunately) not in freefall. Meanwhile, Q2 GDP was revised up to 3.3 percent from 3.0 percent, driven largely by a steep drop in imports. Yesterday's $44 billion 7-year auction ended the month’s supply slate on a weak note, with modest demand despite favorable historical trends. Pending home sales dipped for a second straight month, falling 0.4 percent in July, despite a slight year-over-year increase and suggesting that elevated mortgage rates are still dampening housing activity. Relief may come if inflation subsides, enabling the Fed to cut more confidently, but that remains contingent on forthcoming data.

Today’s economic calendar brings the Fed-favorite core PCE price index for July, which showed that core inflation (excluding food and energy costs) ran at a 2.9 percent seasonally adjusted annual rate. That was up 0.1 percentage points from the June level but in line with the consensus forecast. On a monthly basis, the core PCE index increased 0.3 percent, also in line with expectations. Personal income increased 0.4 percent month-over-month while personal spending increased $110.9 billion in July. The week’s calendar closes with Chicago PMI for August and final August Michigan sentiment. We begin the day with Agency MBS prices a little worse than yesterday’s close, the 2-year yielding 3.64 percent, and the 10-year yielding 4.23 percent after closing yesterday at 4.21 percent.