Single Family Market Update: Basel Reform, Rates Stabilize, Inventory Slows, Builders Compete on Efficiency (2026.02.16)

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Federal Reserve Vice Chair Michelle Bowman signaled Basel capital rule changes that could bring banks back into mortgage origination and servicing
Bank mortgage share fell from ~60% in 2008 to 35% by 2023, while nonbanks gained dominance in investor lending
Proposed changes to mortgage servicing asset treatment and LTV-based capital rules could increase bank competition in DSCR and rental lending in late 2026
Mortgage rates holding near 6.04% with spreads compressing toward historical norms, helping stabilize borrowing costs
Refinance activity remains elevated year-over-year while purchase applications show steady but muted demand
Ten-year Treasury yield testing lower end of forecast range, limiting odds of meaningful near-term rate declines
Active housing inventory up 8% year-over-year but growth has cooled significantly from 30%+ earlier in cycle
New listings rebounding seasonally while price-cut percentage declines, signaling stabilizing seller pricing power
Slower inventory growth suggests incremental tightening before headline data reflects it
Beazer Homes reached 100% Zero Energy Ready Home standard across deliveries and expanding solar-powered communities
Builder competition increasingly centered on operating cost savings, not just purchase price or incentives
Energy-efficient upgrades becoming competitive necessity in Sun Belt and builder-heavy markets

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