ARM Update

March 5, 2018

Yield spreads between new-issue hybrid ARMs and Treasuries widened 1 to 2 basis points last week.  Spreads have been relatively stable partially because of the lack of supply in the market. Preliminary estimates for February indicate originations totaled $1.26 billion, a decline of 16.4% from the previous month.

As depicted on the graph below, there has been some narrowing between interest rates on 3/1s and traditional 30-year fixed mortgages, which could lead to higher origination activity.

Last week, activity was primarily focused on the following:




Metrics for some commonly traded structures are below:







Michael S. Erhardt, CPA

Senior Vice President

Investment Strategist

Vining Sparks, IBG

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