The tide may be turning for MBS-gobbling real estate investment trusts. If you’re an investor looking for a buy-low, sell-high trade, this may be it. That is, as long as rates don’t reverse course and head higher. Meanwhile, it’s almost a year since SoFi became an FDIC-insured bank.
Ginnie Mae has ranked as the top agency issuer of single-family MBS for three months running, echoing the market of the 1990s. Production levels continued to drop in November, and it’s hard to see when that will change. (Includes two data charts.)
Interest rates keep falling but has a trough been reached? And if so, have REITs been bottomfishing in conventional MBS? Also, what’s the outlook for 2023 in terms of capital raises?
The Securities and Exchange Commission has delayed implementation of a disclosure rule the industry feared would compromise the ability of many issuers to access the 144A market.
KBRA said that third-quarter MBS issuance volume didn’t meet its expectations and will drop rapidly in the coming year. Meanwhile, both DBRS and Moody’s noted that performance is stabilizing.
Daily MBS trading has been on the rise since April, a positive sign. It seems some investors are willing to buy and hold, but fear over what the Fed might do next rules the roost.
Since the beginning of quantitative tightening in June, the Federal Reserve has been able to shed less than 20% of the agency MBS it had planned by this date.
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