After one of the strongest quarters in years, Q3 told a different story. Production volume pulled back, secondary margins came under pressure, and origination profitability declined, all while mortgage rates moved into the 7% range. But viewed across the full year, the latest RM Select benchmarking results show an industry that showed overall improvement in 2026 despite what the quarter-over-quarter numbers alone suggest.
In this edition of Inside the Trends, Tyler House walks through Q3 performance data from the RM Select Retail IMB peer group. Volume declined 14% from Q2, a steeper drop than the few percentage points that typically separate those two quarters. Yet Q3 production still finished 4% ahead of Q3 2025, and year-to-date volume is running 20% ahead of last year. With average note rates nearly identical year over year, that growth appears to be driven by demand, not just rates.
The bigger story was margin. Secondary gain on sale fell 32 basis points to approximately 266 bps, or about $9,700 per loan. Measured in basis points, that’s the lowest gain-on-sale margin the peer group has recorded in the history of the RM Select program.
Watch the Video
In the video, Tyler explores:
- Why the 14% volume decline says more about a strong Q2 than a weak Q3
- The three forces behind margin compression: specified pool pay-ups, Non-QM investor pricing, and price competition
- How servicing acted as a natural hedge, turning a 12 bps increase in MSR values into a benefit worth roughly 38 bps of quarterly production
- Why pretax earnings rose 7 bps even as net production income fell 55 bps
Download the Q3 Highlights Snapshot
The results are a reminder that in a volatile rate environment, resilience comes from the whole business model, not origination alone. Rate sheets that respond quickly to market moves, a product mix that includes government lending, and a retained servicing portfolio all helped lenders absorb a difficult quarter. Year-to-date pretax earnings are more than double where they stood at this point last year. Much of what comes next depends on rates, but if the market finds some stability, the industry is positioned to keep building on this year’s gains.
For access to the detailed reports, including an analysis of the results, please email us at RMSelect@richeymay.com. To learn how Richey May’s Mortgage Analytics Suite can help you understand your performance relative to peers, contact Tyler directly at Tyler@richeymay.com.
To view a Snapshot Report from a previous quarter, visit our Snapshot Library.
