MBS Weekly Market Commentary Week Ending 4/16/2021

Long-term 30-year yields have fallen to 2.27%, the 10-year is currently yielding 1.583%, and the Fannie Mae 30-year current-coupon spread to the 5/10-year blend tightened to +66. Also of note, the US MBS index option-adjusted spread hit its tightest level in over a decade on Wednesday, closing at 7bps.

According to data published by Freddie Mac, U.S. 30-year home mortgage rates fell to 3.04% from 3.13%. The average 15-year rate increased to 2.35%, down from 2.42% a week earlier. Refinance applications decreased 5% for the week, according to the Mortgage Bankers Association. Refinance applications are 31% lower than this same week a year ago. The purchase index decreased 1% from one week earlier.

Mortgages ended the week outperforming treasury hedges in every coupon. The 3.5 coupon saw the best performance, outperforming the 10-year Treasury by 10 ticks. The Fed is scheduled to purchase $4.6 billion in MBS on Monday.

Economic Calendar:

  • Monday: Class C Notification
  • Thursday: Jobless Claims, Existing Home Sales
  • Friday: New Home Sales