Percentage of FHA-financed buyers across the largest homebuilders

🍂 Good Wednesday morning, and welcome to fall! Today’s edition is 2.5 minutes.

1. Rates hit 7.12% and ARM share jumps to 9.8%

The 30-year fixed surged to 7.12% last week — the highest since 2024 — pushing total application volume down 1.5%.

With fixed rates now more than a percentage point above 5/1 ARM rates, nearly 1 in 10 borrowers chose an adjustable-rate loan last week, up from 8.4% the week before.

• Total volume: down 1.5% week over week

• Purchase apps: down 1% week over week, down 11% year over year

• Refi apps: down 3% week over week, down 62% year over year — lowest since February 2025

• ARM share: 9.8%

Rates moved slightly lower to start this week as oil prices fell on Iran war developments. The fall market is now underway but agents are already reporting a sharp buyer pullback.

Related: Lowest mortgage rates in a week.

2. Percentage of FHA-financed buyers across the largest homebuilders

Since the Pandemic Housing Boom ended, the largest homebuilders have been leaning more heavily on FHA sales to move volume during the current cyclical cooldown.

For example, back in 2022, FHA-financed buyers made up 15% of Ashton Woods' total sales—now that share is 39%.

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3. More Nuggets

💰 New proposal would give up to $50,000 to first-time home buyers. (Axios)

🏡 Pending home sales rises 0.3% in August. (CNBC)

📝 Why more agents are getting their mortgage loan originator license. (HW)

⏰ The best time to buy a house is coming up fast. (Axios)

4. Fannie Mae no longer accepts leases to document rent from a departing residence

Fannie Mae is updating how lenders document projected rent when a borrower converts their current home into a rental. Lease agreements are out — lenders must now use an appraisal, Form 1007, or a market-analysis tool like Zillow or MLS data with at least three comparable rentals.

The upside for move-up buyers: no tenant required before applying. The math still applies — rent is cut 25% for vacancy and expenses, then netted against the full mortgage payment. Any positive amount offsets the departing home's payment but can't be added to qualifying income.

Freddie Mac still allows leases and doesn't permit market-analysis tools as a substitute — so check which GSE you're delivering to before presenting this as an option. Effective November 1 for new applications.

5. Zillow seeks permanent dismissal of mortgage kickback lawsuit

Zillow is asking a federal court to permanently dismiss a RESPA lawsuit accusing it of steering borrowers to its in-house mortgage business through its agent referral program — the third version of the complaint plaintiffs have filed since the case began last September.

Judge Robart dismissed the second version in July. Plaintiffs dropped their RICO claims, refiled with a 47-page RESPA-focused complaint, and Zillow is now seeking dismissal with prejudice — meaning no further chances to refile.

Its core argument: preapproval letters aren't a RESPA-covered service, plaintiffs were never required to use Zillow Home Loans, and most don't even claim their agent referred them there.

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