The non-qualifying mortgage (non-QM) market posted another record month for lock volumes in December on strong demand for non-conforming loans, exceeding November’s previous high-water mark, newly released indicators from Optimal Blue show.
Non-conforming loans, which fall outside the conforming underwriting guidelines set by Fannie Mae and Freddie Mac, as well as government guidelines set by the Federal Housing Administration (FHA) and U.S. Department of Veterans Affairs, include non-QM consumer and business-purpose mortgages as well as jumbo, high-balance loans.
As conforming lock volumes slipped 0.86% from November and 0.18% over the year to comprise 51% of total market share in December, non-conforming lock volumes rose 0.17% over the month and 1.4% from a year ago to exceed 17% of total activity last month.
Rising non-conforming volumes amid falling conforming volumes has been happening since the pandemic, fueled by market distortions and enhanced capital markets execution.
Within the non-conforming category, non-QM lock volumes exceeded 9% market share of overall mortgage activity last month, according to the December 2025 Market Advantage mortgage data report from Optimal Blue.
December gains were concentrated within debt-service coverage ratio (DSCR) rental investor loans, which gained 1.19% over the month and 0.51% from a year ago, and bank statement loans that gained 2.58% over the month despite declining 1.85% over the year.
“All other” non-QM locks tracked by Optimal Blue were 3.77% lower over the month and 7% lower over the three months prior in December, while 1.34% higher than one year ago. Overall non-QM activity was up 0.5% over the month.
The early retrospective on December mortgage activity comes as investors gear up to continue their momentum in 2026, with their heightened market activity unlikely to abate. As their market share has risen, so has the importance of their liquidity cushion to the broader housing market.
Real estate investors maintained a roughly 30% purchase share through 2025, boosted by declining owner-occupied purchase production, less competition from owner-occupied buyers and an increasing reliance on cash amid poor purchase affordability.
Investor purchase share exceeded pandemic-era peaks of 27.2% in February 2022 and previous post-pandemic peaks of 27.1% in January 2024, while dramatically outpacing pre-pandemic purchase shares between 15% and 20% from January 2018 to January 2020.
Ratings firm DBRS Morningstar reported in late November that non-QM mortgage-bond issuance hit a record $20 billion in the third quarter of 2025, with around half comprising investor-purpose loans as non-QM volumes “reached record supply metrics.”
Optimal Blue’s lock data shows investor loans made up just over 32% of non-QM locks last month, compared to 36% for bank statement locks and just under 32% for “all other” non-QM products.
