As investors sift through the tea leaves of the bond market, the average daily trading volume in agency MBS increased 11% in July from the month prior. But where we go from here is anyone’s guess.
The Financial Stability Oversight Council wants to take a close look at the secondary mortgage market but isn’t letting on about its agenda. Maybe a “housing czar” will come out of this, some wonder.
With overnight funding in the agency repo market hovering around 15 basis points and term repo rates a shade above the one-month LIBOR, yields for agency mREITs could edge upward, KBW analysts predict.
The company believes delivering loans to agency MBS helps it be a “high velocity, capital light and cash generating” operation. This year, the firm has held mortgages on its balance sheet for as few as eight days.
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