FRM Update

September 16, 2019


Yield spreads for current-coupon MBS to Treasurys widened with the market sell-off, with 30-year widening by 12 bps to 101 bps, while 15-year increased 3 bps to 65 bps. Yield spreads on mortgage product remain at multi-year highs, despite the recent backup in rates.

Activity was strong last week as investors were anxious to take advantage of cheaper prices and higher projected yields. The following is a list of actively traded sectors and coupons:

In case you missed it, September prepayment speeds were released last week.  While speeds increased overall, they did not increase as much as last month.  A complete recap of the commentary can be found here.

Mortgage Rates and Refinance Activity

Benchmark mortgage rates increased last week. 15-year mortgage rates increased 19 bp to 3.25%, while 30-year mortgage rates increased 4 bps to 3.79%.

Mortgage applications rose 2.0% in total last week as refinancing activity stabilized and purchase applications recovered for a second week, notching their strongest weekly increase since early June. Refinances were essentially unchanged, up just 0.4% compared with the previous week. They were still 169% higher than the same week one year ago.

Michael S. Erhardt, CPA

Senior Vice President, Investment Strategies

Vining Sparks IBG, LP

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