The Fed and commercial banks purchased a combined $1 trillion in agency MBS over the past 12 months, more than 145% of the net supply. (Includes data chart.)
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.
In an industry update, Keefe, Bruyette & Woods predicts it may still take some time before the establishment of an emergency funding facility for residential servicers with MBS payments coming due.