They are one of the most important investments in the housing market, and as such, their performance is closely monitored. In this article, we will provide a recap of the activity of MBS in the market on November 2, 2022.
On November 2, 2022, the market for MBS was mixed. In early trading, prices moved up, but in mid-day trading, they began to slip. The Fannie Mae 30-year current coupon closed at 102-10, up one basis point from the previous day, while the 15-year current coupon ended the day at a level of 101-19, down two basis points.
The yield for the 30-year current coupon rose to 1.84%, a 0.02% increase from the previous day, while the 15-year current coupon had a yield of 1.40%, a 0.04% decrease. The performance of the higher coupons was mainly positive, with almost all of them ending up in positive territory. The biggest gainer was the 5.5% coupon, which closed at 106-18, up seven basis points from the previous day.
The spread between the 10-year Treasury yield and the 30-year mortgage rate widened to 0.45%, up from 0.44% on the previous day. The spread between the 10-year Treasury yield and the 15-year mortgage rate also widened, to 0.29%.
Overall, the MBS market was fairly stable on November 2, 2022, with the overall trend being slightly positive. Prices rose in early trading, but slipped in mid-day trading. The higher coupons posted mostly positive gains, while lower coupons remained largely unchanged. The spread between the 10-year Treasury yield and the 30-year mortgage rate widened slightly, while the spread between the 10-year Treasury yield and the 15-year mortgage rate also widened.
Overall, the performance of the MBS market on November 2, 2022 suggests that the housing market remains relatively stable despite the economic uncertainty associated with the coronavirus pandemic. Despite a slight pullback in mid-day trading, prices rose overall, and the higher coupons posted mostly positive gains. This indicates that investors remain confident in the housing market and are still willing to invest in mortgage-backed securities. Furthermore, the widening of the spreads between the 10-year Treasury yield and the 30-year and 15-year mortgage rates suggests that investors remain optimistic about the long-term outlook of the housing market. Taken together, these trends suggest that investors remain confident that the housing market will remain strong in the near future despite any short-term volatility.
This article was contributed on Aug 09, 2023