Vista Index Services plans to release an index next month that will give investors an opportunity to hedge against delinquency risks in Ginnie MBS, rather than selling securities if there’s a downturn.

The agency market is responding to the decline in mortgage rates since early September with rate-term refinance business doubling in October. ARMs and 15-year loans are also surging. (Includes two data tables.)

The Fed’s shift to rate cuts is helping to increase demand for agency MBS. And other activity at the federal level has prompted a reduction in volatility, providing stability for investors.

While the Fed is moving away from purchases of agency MBS, portfolio managers at PIMCO believe additional purchases are warranted. In the meantime, the GSEs are increasing their investments.

Beginning in December, the Federal Reserve will adjust its balance sheet strategy and no longer reinvest proceeds from payoffs of agency MBS into more MBS.

MBS is the place to be right now with average daily trading volumes at their peaks for the year.

The sentiment among investors at the ABS East conference this week was overwhelmingly positive. Attendance at the event hit a record, and investor demand for MBS and ABS is expected to remain strong into 2026, buoyed by anticipated interest rate cuts by the Fed.

Trade groups representing smaller lenders called on the Trump administration to prompt the GSEs to increase their holdings of MBS as a way to reduce mortgage rates.

Issuance of specified-pool MBS in the third quarter was up 21.5% at Freddie Mac. The biggest increase was in pools of loans on New York properties.

Real estate investment trusts that focus on agency MBS increased their earnings in the third quarter, helped by interest rate trends.