FRM Update

July 22, 2019


Current-production coupon MBS were relatively stable last week with the 15-year wider by 1 bp to 52 bps and the 30-year tighter 1 bp to 73 bps. Mortgage spreads remain relatively wide versus historical levels and other sectors.

As mortgage rates are holding near their lowest levels in two and half years, investors remain focused on seasoned pools and lower coupons.  Activity over the past few weeks has been centered in 15- and 20-year MBS with a modicum of trades in longer 30-year pools and off-the-run collateral.

The following is a list of actively traded sectors and coupons:

Mortgage Rates and Refinance Activity

Benchmark mortgage rates were relatively stable last week. 15-year mortgage rates held firm at 3.23%, while 30-year mortgage rates increased 4 bps to 3.84%.

Mortgage applications dropped on fewer purchase inquiries last week.  Refinancing activity recovered 1.5% last week from the prior week’s 6.5% drop, but overall applications fell 1.1% on weaker purchase activity. Purchase applications cooled 3.8% as the 30-year mortgage rate estimate edged up to a four-week high, but remains a full percentage point below last November’s peak.

Michael S. Erhardt, CPA

Senior Vice President, Investment Strategies

Vining Sparks IBG, LP

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