Fannie projects that the average interest rate on a 30-year fixed-rate mortgage will hold at 6.1% in the second quarter before declining to 6.0% in the third quarter and then remain at that level through the end of 2027.
The portfolios include both MBS and mortgages, with MBS holdings at Fannie Mae and Freddie Mac up nearly 60% on a quarterly basis in the fourth quarter of 2025.
The Fed will soon issue a proposal to loosen capital requirements for bank holdings of mortgage servicing rights and a proposal loosening capital requirements for mortgages held in portfolio by banks.
The increase in issuance occurred across several categories, including a 79.2% surge in volume tied to loans eligible for sale to the government-sponsored enterprises.
David Spector, CEO of Pennymac Financial Services, said the firm’s correspondent aggregation platform is facing increasing competition from the GSEs’ cash window.