REIT values can rise and fall depending on interest-rate swings. The good news is that rates have steadily dropped the past five weeks. The bad news: A rate cut by the Fed will need a recession to occur first.
Capitol Federal Savings Bank took a loss of about $200 million on the sale of $1.3 billion of securities (largely MBS) with low interest rates. The bank reinvested the proceeds in higher-yielding assets and paid off some debts. Pacific Premier Bank made a similar move this week.
MBS creation is weak thanks to high mortgage rates and anemic refis but one positive for the market is the October increase in agency trading volumes. A real sign of hope or a head fake?
The Federal Reserve’s push to run MBS off of its balance sheet may cause interest rates to stay high even after quantitative tightening measures cease.
Mortgage industry trade groups continue to pressure the Biden administration to intervene in the MBS market to help struggling homebuyers overcome high interest rates and low supply.
When times turn tough, some mortgage REITs start cutting the dividends they pay shareholders, but not all. Meanwhile, book values are getting slammed. A time to buy these equities or sit on the sidelines?
HUD IG launches inquiry into Ginnie’s handling of Reverse Mortgage Funding’s bankruptcy; DBRS revises rating criteria for commercial MBS; WeWork exposure in commercial MBS; another record profit for Farmer Mac; ETF targets newer agency MBS.
Mortgage rates at the end of October were at their highest level since 2000, and agency MBS issuance fell 10%. It’s looking like a replay of the nosedive at the end of last year. (Includes two data tables.)