FRM Update

December 13, 2021



Current Yield Spreads

Mortgages performed well last week as the broader market sold off and the 10-year Treasury improved 14 bps to finish the week at 1.49%. Nominal yield spreads on 15-year MBS tightened 5 bp to 16 bps, while spreads on 30-year MBS to Treasurys with similar duration tightened 4 bps to 58 bps.



Trading Activity

The summary below reflects customer purchase activity from the previous week. Activity was dominated by UMBS 20-year 2.0s (both new production and semi-seasoned pools). Rich valuations on 15-year passthroughs continue to push investors to longer finals with higher spreads.

There’s also been solid two-way flow as depositories are actively repositioning (selling underperforming positions) to improve earnings in future periods.

TBA-Eligible Securities:

Non-Deliverable Securities:

Specified Pools:

Specified Pools:


Mortgage Rates and Applications

Bankrate’s most recent survey shows mortgage rates were on the rise last week. 15-year rates increased by 2 bps to 2.53%, while 30-year rates rose by 7 bps to 3.25%. Mortgage applications for the week ending December 3 rose 2.0% on a 9.0% increase in refi apps and a 5.0% decrease in purchase apps.  Refi apps are now down 45% from January’s average.  Purchase apps, which were down 27% through July, are now down just 13% from January.



Michael S. Erhardt, CPA

Senior Vice President, Investment Strategies

Vining Sparks

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