MBS Weekly Market Commentary Week Ending 7/23/2021

Long-term 30-year yields have fallen to 1.909 %, the 10-year is currently yielding 1.266%, and the Fannie Mae 30-year current-coupon spread to the 5/10-year blend widened to +73.

 

According to data published by Freddie Mac, U.S. 30-year home mortgage rates fell to 2.78 % from 2.88%, their lowest level since February. The average 15-year rate decreased to 2.12%, down from 2.22% a week earlier. Mortgage applications decreased 4% in the week that ended July 16th, according to MBA weekly survey data. Refinance applications decreased 3% for the week, and purchases decreased 6%.

The agency mortgage sector on Friday ended with the entire UMBS 30-year coupon stack outperforming their hedges. Trade volume was very light. The Fed will purchase $3.2 billion UMBS 30-year 2.0% and 2.5%, and $1.3 billion UMBS 15-year 1.5% and 2.0% today. Economic Calendar:

  • Monday: New Home Sales
  • Tuesday: FHFA and S&P Home Price Indexes
  • Wednesday: Fed Rate Decision
  • Thursday: Pending Home Sales