FRM Update

April 22, 2019



MBS

Yield spreads on current production MBS to Treasuries widened last week, with 15-year increasing 5 bps to 47 bps, while 30-year widened 3 bps to 74 bps.

The MBA Refinance Index declined modestly once again last week; however the index remains elevated at 1453.  To put this into context, we haven’t seen this much activity since the summer of 2017.

Buying activity last week was spread somewhat evenly across the various sectors outlined below. There was also solid two-way flow with customers disposing of odd-lots and underperforming positions.

The following represents an overview of the activity last week:

15-Year MBS

20-Year MBS

30-Year MBS

CMBS



Mortgage Rates and Refinance Activity

Benchmark mortgage rates ticked up slightly last week. 15-year mortgage rates increased 6 bps to 3.56%, while 30-year mortgage rates rose 3 bps to 4.12%.

After a solid four-week run that tracked mortgage rates, mortgage applications have now cooled in the first two weeks of April. Total mortgage applications fell 3.5% last week after a 5.6% drop in the week before. However, the slower pace of activity has been exclusively driven by refinancing interest which cooled 8.2% last week and 11.4% the week prior.  As for new purchases, the weekly data’s implications were more positive and continued to point to stability in home sales activity. Purchase applications inched up 0.9% last week and have now risen in each of the last six weeks. The six-week run marks the longest consecutive stretch of improvement since at least 1990 and has pushed the index up 16.7% from where it started March.





Michael S. Erhardt, CPA

Senior Vice President, Investment Strategies

Vining Sparks IBG, LP

INTENDED FOR INSTITUTIONAL INVESTORS ONLY.
The information included herein has been obtained from sources deemed reliable, but it is not in any way guaranteed, and it, together with any opinions expressed, is subject to change at any time. Any and all details offered in this publication are preliminary and are therefore subject to change at any time. This has been prepared for general information purposes only and does not consider the specific investment objectives, financial situation and particular needs of any individual or institution. This information is, by its very nature, incomplete and specifically lacks information critical to making final investment decisions. Investors should seek financial advice as to the appropriateness of investing in any securities or investment strategies mentioned or recommended. The accuracy of the financial projections is dependent on the occurrence of future events which cannot be assured; therefore, the actual results achieved during the projection period may vary from the projections. The firm may have positions, long or short, in any or all securities mentioned. Member FINRA/SIPC.
Copyright © 2021
Member FINRA/SIPC
This is a publication of Vining-Sparks IBG, L.P.
775 Ridge Lake Blvd., Memphis, TN 38120