MBS Weekly Market Commentary Week Ending 5/14/2021

Long-term 30-year yields have fallen to 2.343%, the 10-year is currently yielding 1.628%, and the Fannie Mae 30-year current-coupon spread to the 5/10-year blend widened to +64.

 

According to data published by Freddie Mac, U.S. 30-year home mortgage rates fell to 2.94% from 2.96%. The average 15-year rate decreased to 2.26%, down from 2.30% a week earlier. Mortgage applications increased 2.1% in the week that ended May 7th, according to MBA weekly survey data. Refinance applications increased 3% for the week. Purchases also increased 1% compared to the prior week.

Mortgages mostly underperformed Treasury hedges on Friday, with the 3.5% being the only coupon to outperform. The Fed is expected to purchase $3.3 billion UMBS 30-year 2.0% and 2.5%, and $1.9 billion of Ginnie Mae II 30-year 2.0% and 2.5% today. Economic Calendar:

  • Monday: NAHB Housing Market Index, TIC flows
  • Tuesday: Class C Notification, Housing Starts, Building Permits
  • Wednesday: FOMC Minutes
  • Friday: Existing Home Sales