MBS Weekly Market Commentary Week Ending 5/21/2021

Long-term 30-year yields have fallen to 2.321%, the 10-year is currently yielding 1.621%, and the Fannie Mae 30-year current-coupon spread to the 5/10-year blend tightened to +64.

 

According to data published by Freddie Mac, U.S. 30-year home mortgage rates rose to 3.00% from 2.94%. The average 15-year rate increased to 2.29%, up from 2.26% a week earlier. Mortgage applications increased 1.2% in the week that ended May 7th, according to MBA weekly survey data. Refinance applications increased 4% for the week. Purchases decreased 4% compared to the prior week.

Mortgages outperformed Treasury hedges on Friday, with the 4% coupon seeing the most improvement. Today, the Fed is set to purchase $6.6 billion UMBS 30-year 2.0% and 2.5%, and $1.1 billion. Economic Calendar:

  • Monday: Chicago Fed Activity Index
  • Tuesday: FHFA House Price Index, New Home Sales, Consumer Confidence
  • Thursday: Durable Goods Orders, GDP, Unemployment Claims