U.S. mortgage rates, and rates in general, are not just a matter of what happens in the United States. LOs, and economists, are always watching what is happening not only in the U.S. but around the world and, for LOs, how trends impact their client’s rates. For example, Chinese manufacturers account for 70 percent of the global market for household cleaning robots, a milestone cemented at the end of last year when the company that created the Roomba and essentially invented the category, the U.S.-based iRobot, was bought out of bankruptcy by a Chinese firm. Roborock is the biggest player, with a global market share of 27 percent. (Apparently the Trump Administration has plans to counter China’s economic moves around the world.) In the United States, in a bit of a shock, despite being the host of the World Cup, the United States actually experienced a year-over-year decline in visitors in June. Total overseas visitors were down 1.8 percent year over year in June to 2.8 million; that is compared to an already-low June 2025 figure, which itself was down 3.4 percent from the same month of 2024. The general hesitation to visit the United States at this time appears to have ensured that even this massive global sporting event was a total wash. Some may think, “Good riddance” but tourism accounts for nearly 9 percent of U.S. GDP.
Saturday Spotlight: Truework, a Checkr Company
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When “Date the Rate, Marry the House” Doesn’t Pan Out
“Date the rate, marry the house” is a popular real estate strategy: buy a home you love today, even at a high interest rate, with the plan to refinance to something better once rates come down. A new Truework survey of 1,000 recent U.S. homebuyers suggests the plan isn’t panning out and is reshaping what affordability actually means after closing.
The research found that 73% of recent buyers planned to refinance when they bought their home, treating today’s rate as a placeholder rather than a permanent cost. Eighty-five percent now say refinancing within three years matters to their financial health, up sharply from 56% a year ago, and half say their mortgage becomes unsustainable without a lower rate. For a large share of recent buyers, the rate cut they were counting on simply hasn’t arrived.
That gap is driving a pattern that Truework calls “Conditional Affordability”: A mortgage that works today, but only as long as something else goes right: a rate cut, an income bump, or continued sacrifice elsewhere in the budget. And 88% of recent buyers say a common financial setback could put their mortgage payment at risk. These aren’t buyers who overextended recklessly; they’re people who qualified under standard underwriting and still find the math fragile.
First-time buyers report the highest strain, with 87% saying they’ll need to take financial action if they can’t refinance. Millennials are a subtler case: most had bought a home before, yet two-thirds still expected rates to fall this time around.
The industry has historically treated “can this borrower close the loan” and “can this borrower sustain it” as the same question. The data suggests they’re not, and “date the rate” only works if the rate eventually says yes.
These findings come from Truework’s 2026 Recent Homebuyer Report, which surveyed 1,000 Americans who purchased a home in the past 24 months. The full report includes generational breakdowns and a segmentation of how buyers are managing this risk.
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The Missing Principle in Housing Finance
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I recently received a write up from Marc Biron, CEO of Home Diversified Solutions Corp. (Steven Siegel, co-author, serves in an independent advisory capacity, and the underlying analysis was co-authored by Marc Biron and Michael J. Seiler and published in Real Estate Finance in 2022.) The article argues that diversification, the foundational risk-management principle of modern finance, has never been applied at scale to owner-occupied housing. It explains how a pooled, non-tradable home-price risk-sharing structure could materially reduce mortgage credit losses, support safer low-down-payment lending, and improve household financial resilience.
“This should be especially relevant to your mortgage-industry readership because it connects household home-price concentration directly to origination risk, default performance, capital efficiency, affordability, and the secondary market. The underlying concept is intended as a practical mortgage-market architecture.
“Diversification transformed every corner of modern finance except the largest asset most households will ever own. The typical American household holds 60 to 70 per cent of its net worth in a single asset: the family home. One property, on one street, in one city. No pension fund, insurer or asset manager would be permitted to run money this way. Yet that is how most households are effectively required to hold the largest investment of their lives.
“Harry Markowitz showed in 1952 that diversification can reduce risk without sacrificing expected return, the closest thing finance has to a free lunch. The insight earned him a Nobel Prize and reshaped institutional investment, bank lending, insurance, and retirement saving. It has never been applied at scale to owner-occupied housing. Homeowners still bear the full idiosyncratic price risk of a single property, with no practical way to offset local losses against gains elsewhere.
“The cost of that omission was made brutally visible after 2007. The S&P Case-Shiller national index fell 27.4 per cent from peak to trough, but the national figure concealed the real story: Phoenix, Las Vegas, and California’s Inland Empire fell by more than half, while much of Texas and the upper Midwest barely moved. Two homeowners with similar credit scores and underwriting could meet opposite fates. What separated them was not creditworthiness. It was geography… a risk that diversification could have substantially absorbed.
“This is not a new observation. Robert Shiller identified housing as the largest unhedged risk in household portfolios three decades ago, and housing futures began trading on the Chicago Mercantile Exchange in 2006. They failed not conceptually, but architecturally. Homeowners could not realistically trade futures; institutions lacked the natural offsetting exposure needed to make deep markets; and the basis risk between a city index and an individual home was too large. The instrument never reached the people whose risk it was designed to carry.
“A more practical solution is to embed diversification in the housing-finance transaction itself. Under a structure we have analyzed in published research, a homeowner enters a non-tradable, subordinated contract that exchanges the home’s individual price performance for the weighted-average return of a broad pool. If the home outperforms the pool, the homeowner pays the difference when the arrangement terminates; if it underperforms, the pool pays the homeowner. The family keeps the house, the occupancy, and every consumption benefit of ownership. What it gives up is the lottery ticket… and the trapdoor.
“The credit consequences are striking. Modelling more than 1mn Freddie Mac loans originated between 1999 and 2020, a diversified mortgage requiring no down payment produced expected annual credit losses of roughly 5 basis points, compared with about 29 basis points for a conventional mortgage with a 20 per cent down payment. Even under a replay of the global financial crisis, modelled losses reached only about 25 basis points. Diversification directly addresses the concentrated local-price risk that drives many defaults and could make responsibly underwritten low-down-payment lending far safer without relying solely on mortgage insurance.
“The homeowner gains too. Lower risk supports a lower required return. On a $300,000 home held for 15 years, our analysis estimates the capitalized value of the benefit at roughly $44,000 in today’s money, about 14 per cent of the home’s value. Research published in the Review of Financial Studies in 2021 likewise found that the idiosyncratic component of individual house returns is large and that homeowners would rationally pay meaningful sums to insure against it.
“There are real hurdles, and candor requires naming them. The legal characterization of the contract must be resolved under existing mortgage, securities, commodities, and state property law. Pool governance must control adverse selection. Valuation, termination, and settlement protocols must meet institutional standards. Liquidity arrangements must address timing mismatches between payments into and out of the pool. These are serious design and implementation questions, but they are not the architectural dead end that doomed housing futures.”
Marc wrapped up with, “What is remarkable is not that diversification could be applied to housing. It is that, more than 70 years after Markowitz, it largely has not been. Modern finance would never accept this concentration of risk in a pension fund, insurer, or bank portfolio. It should no longer accept it as an unavoidable condition of homeownership.”
Flood maps: another fly in the lending ointment
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Aon Edge’s John Dickson observes that lenders and servicers are using flood maps that are a decade out of date to decide who’s at risk today. Meanwhile, insurance companies are miles ahead in using current data.
“The National Flood Insurance Program has always had what I’d call a split personality and understanding that tension is the key to understanding almost everything happening in flood risk right now. On one side, it’s supposed to function as an effective risk transfer operation, pricing coverage in a way that’s supportable long into the future. On the other side, it’s a social assistance program with an extraordinary mandate: provide flood insurance to everybody, everywhere, regardless of the structure, the claims history, or the risk profile involved. It doesn’t say no.
“Private industry doesn’t work that way, and it was never designed to. What makes that mandate even more remarkable is that it was handed to the NFIP before we had anything close to today’s computing power or modeling capability. After Hurricane Andrew reset the entire wind insurance market along the coast from Brownsville to Cape Cod, the modeling community responded, and even that effort, modeling a coastal strip maybe twenty miles deep, was a fraction of what it takes to model flood risk for an entire country.
“The NFIP was told to do exactly that, for every property in America, with none of today’s tools. That it’s had a rocky road since is not surprising. That it still matters is not in question, because homes keep getting built where nature tells us they shouldn’t, and the private market simply isn’t going to price or underwrite every one of them.
“Where I do think we’re moving in the right direction is in how private capital has stepped in since Biggert Waters and the Homeowners Flood Insurance Affordability Act opened that door. Fifteen or twenty years ago, private insurers would have told you flood risk in a place like Perl wasn’t insurable at all. The investment in modeling and mapping since then has flipped that conversation entirely, and now capital is actively rushing toward new ways to underwrite risk that used to be considered unwriteable.
“Mapping resolution tells the story concretely. Less than a decade ago, we were working with resolution in the 25 to 50 square meter range, which is a large enough parcel that conditions can vary meaningfully across it. Today, in well-mapped, well-developed areas, resolution can get as tight as one square meter. That level of granularity changes what kind of decision you can actually make, both for an insurer pricing a policy and for a homeowner deciding whether to buy one.
“The recent President’s Council report on FEMA reform landed on a conclusion I don’t think is seriously disputed: the NFIP as it’s currently run is not sustainable, and it needs ongoing reform rather than a single fix. The recommendations echo something we’ve already watched play out at a smaller scale in Florida, the depopulation of Citizens Property Insurance Corporation, which had ballooned into the largest homeowner’s insurer in the state before officials worked, slowly, to shrink it back down and let a more functional private market return.
“New capital is now writing Florida homeowners policies at a pace we haven’t seen in years because of that effort. The Review Council is recommending something similar for flood: turning the NFIP into more of a clearinghouse that directs property owners toward private options, building a takeout mechanism where a panel of private programs can absorb risk directly out of the NFIP, and continuing the shift toward Risk Rating 2.0, which lets the program price at the individual risk level using real analytics instead of blunt flood maps.
“That last piece is where I see the sharpest disconnect in the system today, and it’s one that directly affects lenders. Risk Rating 2.0 is genuinely a major step forward, and the NFIP itself will tell you it no longer relies on flood insurance rate maps to set a policy’s price. But those same maps are still what lenders are required to use to determine whether a borrower must carry flood insurance as a condition of a federally backed mortgage, and many of those maps are a decade or more out of date. That’s using a fifteen-year-old newspaper to decide what the weather is doing today. The program pricing risk with current data and the program determining mandatory purchase with stale data have quietly drifted apart, and closing that gap needs to be a priority, not an afterthought.
“For lenders working within that constraint today, since the servicing requirements around mandatory purchase leave very little discretion once a loan is headed to the secondary market, the highest-leverage thing they can do is educate property owners, agents, and real estate professionals on a distinction that gets collapsed constantly: not being required to buy flood insurance is not the same thing as not being at risk of flooding. We see this over and over with inland flooding from heavy rainfall, much of it landing in so-called X zones outside the mandatory purchase requirement. Water doesn’t stop at the arbitrary line drawn on a map. Lower risk doesn’t mean no risk, and until that distinction is genuinely understood by the people standing at closing, better maps alone won’t close the coverage gap.
“If there’s one thing I think gets lost entirely in how we consume information about disasters today, it’s what recovery actually looks like once the news cycle moves on. Hurricane Helene left a massive flood footprint on Florida’s west coast, and headlines shifted to the next storm within weeks, even though people affected by Helene are still rebuilding more than a year later. The same is true switching from flood to fire: communities hit by the Eaton and Palisades fires are, by some measures, barely 20 to 25 percent rebuilt. Insurance is fundamentally a mirror, meant to give someone an accurate reflection of what’s actually at stake so they can make an informed decision about their family and their investment.
“Our job as an industry is to keep removing the distortion from that reflection, better maps, better resolution, better education on what mandatory purchase actually means, so that the mirror people are looking at matches the risk they’re actually carrying, long after the headlines have moved on to something else.”
I won’t be impressed with technology until I can download food.
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(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes, visit the Chrisman Job Board. This newsletter is intended for sophisticated mortgage professionals only. There are no paid endorsements by me. For the latest mortgage news, visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.ChrismanCommentary.com. Copyright 2026 Chrisman LLC. All rights reserved. Paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman. The views and opinions in this newsletter are mine alone unless otherwise specifically stated herein.)
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