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PennyMac Q2 profit falls 84% as mortgage volumes drop

Q2 net income was $22 million, and lock volume fell 18% to $31.5 billion as higher interest rates weighed on mortgage production and profitability.

Reported · Written up by our desk · Residential

PennyMac Financial Services reported second-quarter 2026 net income of $22 million, down 84% from the same period a year earlier, confirming layoffs as the mortgage market cooled. The company said higher interest rates reduced mortgage production volume and pressured results compared with the prior quarter.

In the quarter, lock volume declined 18% to $31.5 billion. Servicing pretax income fell to $22 million, and adjusted ROE dropped to 7%, while annualized return on equity fell to 2% from 14% a year earlier, according to HousingWire.

PennyMac also reported weaker per-share results, earning 41 cents per diluted share versus $2.54 in Q2 2025. Total net revenue rose 12% year over year to $497 million, while adjusted net income was $74 million, or $1.39 per diluted share, down from $124 million, or $2.31 per share, a year earlier, HousingWire reported.

The lender and servicer said it eliminated select positions in its lending and mortgage fulfillment operations and closed an office in Franklin, Tennessee, after layoffs in consumer direct lending a month earlier. Chairman and CEO David Spector attributed results to higher rates and said PennyMac is taking steps to realign its cost structure as it invests in AI and automation, the outlet added.

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