2Q26 Mortgage Finance Preview: Challenging Origination Environment Returns

Research evidence excerpt

2Q26 Mortgage Finance Preview: Challenging Origination Environment Returns

Equity Research

7 July 2026

U.S. Consumer Finance

2Q26 Mortgage Finance Preview:

Challenging Origination

U.S. Consumer FinanceEnvironment Returns

NEUTRAL

We lower our origination estimates and trim EPS estimates Unchanged

for the originators to reflect an elevated 30Y FRM and a softer U.S. Consumer Finance Terry Ma, CFA

spring selling season. We downgrade PFSI to EW on a lower +1 212 526 7965

ROE outlook, while we continue to favor FAF, RKT, and terry.ma@barclays.comBCI, US

UWMC. Jack Margolius

+1 212 526 9132

We have revised our origination estimates to reflect an elevated mortgage rate and a more jack.margolius@barclays.com

BCI, USpersistent higher-for-longer outlook. While the 30-year FRM is only 11bps higher since the end of

1Q at 6.49%, the 2Q average rate is roughly 30bps above the 1Q average of 6.11%. We are Cordelia R Deng

lowering estimates to account for the refinance volume pulled forward in 4Q25 and 1Q26. As a +1 212 526 7625

result, we reduce our FY26 origination forecast by 7.8% vs. our prior estimate, driven primarily cordeliar.deng@barclays.com

BCI, USby a 15.4% cut to our refinance outlook, implying a 9.7% decline from 2Q to 4Q. We also lower

FY27 origination estimates by 5.2%, though we see potential upside depending on the trajectory

of U.S.-Iran peace negotiations and their impact on rates.

Key Themes for the Mortgage Space: (1) With the 30Y FRM at 6.49% (quarter-end), both refi

and purchase application data showed a marked slowdown in 2Q. Moreover, our channel

checks suggest the spring selling season got off to a slower-than-normal start. (2) Currently,

~4.0% of MDO is 50bps ITM at the quarter-end 30Y FRM, down from 8.3% at 1Q end, which likely