MBS Weekly Market Commentary Week Ending 4/9/2021

Long-term 30-year yields have fallen to 2.333%, the 10-year is currently yielding 1.662%, and the Fannie Mae 30-year current-coupon spread to the 5/10-year blend tightened 2 basis points to +68. The spread has tightened to its lowest in almost two months.

According to data published by the MBA, mortgage applications fell 5.1% in the week that ended April 2nd. The Purchase Index was down 4.6%, after falling 1.5% in the prior week. Refis fell 5.3% after falling 2.5% in the prior week. The average 30-year fixed rate is 3.36%. FHA purchases are down 6.7% after rising 4.1% in the prior week.

MBS outperformed Treasuries this week, and lower coupons saw the best performance. This week could bring upward pressure on rates as Treasury auctions are set to sell $120 billion in tandem with issuances of corporate debt.

Economic Calendar:

  • Monday: Class A Notification
  • Tuesday: CPI
  • Thursday: Class B Notification, Jobless Claims
  • Friday: Building Permits / Housing Starts