The U.S. mortgage market continues to generate more purchase business, but where that business is being written is changing.
New data from Optimal Blue's June 2026 Market Advantage report shows purchase rate-lock volume increased 10% from May and 14% from a year earlier, accounting for more than 81% of all mortgage locks. At the same time, conforming loans fell below half of all production for a third consecutive month, underscoring a growing shift toward government, jumbo and non-QM lending.
For loan originators, the report suggests today's purchase market increasingly rewards product expertise beyond traditional agency lending.
Conforming mortgages represented 48.6% of June production, extending a decline that first pushed the category below the 50% threshold in April. Meanwhile, non-conforming loans expanded to 19.3% of total production, their highest share in several years. FHA loans accounted for 18.7% of locks, while VA loans represented 12.6%.
Non-qualified mortgages also continued gaining traction. Optimal Blue reported Non-QM loans accounted for 9% of total lock volume in June, up 1.4 percentage points from a year earlier.
Purchase Market Continues Strengthening
Overall mortgage activity also improved during the month.
Total rate-lock volume increased 10% month over month and 15% year over year, with purchase loans making up 81% of all locks. Purchase lock volume reached its highest level since early spring, while refinance activity remained materially stronger than much of 2025. Cash-out refinance volume climbed 11% from May and 10% year over year, while rate-and-term refinances rose 6% month over month and 32% annually.
Mortgage rates changed little during the month. Optimal Blue's benchmark 30-year conforming fixed rate edged up one basis point to 6.45%, remaining 22 basis points below June 2025 levels.
Borrower Profiles Remain Resilient
The report also points to modest improvements in borrower affordability despite elevated home prices.
Purchase debt-to-income ratios remained below year-ago levels across conforming, FHA and VA loans, suggesting borrowers have gained some financial flexibility compared to last year. First-time homebuyers accounted for 45% of conforming purchase locks in June, nearly three percentage points higher than a year ago, while FHA's first-time buyer share remained elevated at 69%.
Borrower credit quality also held steady, with the average credit score at 731 nationwide and conforming borrowers averaging 753. Meanwhile, the average locked loan amount climbed to just over $399,000, reflecting continued home-price appreciation and concentration of purchase activity in higher-cost markets.
What It Means
The headline isn't simply that purchase activity improved in June. It's that the composition of mortgage production continues to evolve.
As conforming loans account for a smaller share of overall originations, growth opportunities increasingly depend on serving borrowers who don't fit neatly inside traditional agency guidelines. Whether through jumbo financing, government programs, or specialized Non-QM products, broader product knowledge is becoming less of a competitive advantage and more of a business necessity.
