What Happened?

A number of stocks fell in the afternoon session after 30-year mortgage rates pushed back above 7% following the Federal Reserve's September rate hike, while investors also fretted that AI agents could erode cheap deposit funding. According to Freddie Mac, the average 30-year fixed mortgage rate rose to 7.03% for the week of Sept. 24, up from 6.95% the prior week and the highest since early 2025.

Reuters, citing the Mortgage Bankers Association, earlier reported the MBA's 30-year contract rate jumped to 7.12% in the week ended Sept. 18 — the highest since May 2024 — after the Fed raised its benchmark by a quarter point to a 3.75%–4.00% target range. Higher home-loan rates threaten to cool purchase and refinance volume that supports originators such as Rocket Companies and commercial mortgage names tied to lending activity. Separately, Bloomberg and The Wall Street Journal reported that Meta's Muse AI agent helped spark a selloff in financials on fears that automated assistants could disrupt businesses built on consumer inertia. Apollo Global Management chief economist Torsten Slok, in a note covered by CNBC, warned that agents could sweep household cash into higher-yielding fintech accounts and drain the low-cost deposits banks use to fund loans — compounding rate pressure even as loan demand has not collapsed.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Thrifts & Mortgage Finance company Walker & Dunlop (NYSE: WD) fell 2.6%. Is now the time to buy Walker & Dunlop? Access our full analysis report here, it’s free.
• Thrifts & Mortgage Finance company Rocket Companies (NYSE: RKT) fell 3.8%. Is now the time to buy Rocket Companies? Access our full analysis report here, it’s free.
• Regional Banks company Coastal Financial (NASDAQ: CCB) fell 17.8%. Is now the time to buy Coastal Financial? Access our full analysis report here, it’s free.
• Thrifts & Mortgage Finance company Franklin BSP Realty Trust (NYSE: FBRT) fell 2.9%. Is now the time to buy Franklin BSP Realty Trust? Access our full analysis report here, it’s free.
• Thrifts & Mortgage Finance company PennyMac Financial Services (NYSE: PFSI) fell 1.6%. Is now the time to buy PennyMac Financial Services? Access our full analysis report here, it’s free.

Zooming In On Coastal Financial (CCB)

Coastal Financial’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. But moves this big are rare even for Coastal Financial and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was 2 months ago when the stock dropped 7.8% on the news that the company announced its Executive Vice President and Chief Financial Officer, Brandon Soto, will step down effective August 15, 2026. Soto accepted a position to become the Chief Executive Officer of a banking subsidiary for a privately held financial technology company. Coastal Financial stated that his departure was not related to any disagreements with the company. The departure of a key executive can create uncertainty among investors, even when the circumstances are amicable. Soto will remain with the company through the filing of its second quarter 2026 financial report. Following his departure, Joel Edwards has been appointed as Interim Chief Financial Officer.

Coastal Financial is down 67.4% since the beginning of the year, and at $36.89 per share, it is trading 69% below its 52-week high of $118.97 from January 2026. Despite the year-to-date decline, investors who bought $1,000 worth of Coastal Financial’s shares 5 years ago would now be looking at an investment worth $1,161.

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