Mortgage Refinancing Wave Not Letting Up, to Investors’ Chagrin
- Fed policy, growing lender capacity fuel moves by homeowners
- Prepayment speeds on mortgage bonds fastest in over 15 years
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Mortgage investors will carry unpleasant memories of this year’s surging prepayment speeds, yet as the calendar flips there appears little chance of near-term relief.
The 30-year mortgage rate is at 2.72%, a record low, and for the most credit-worthy borrowers the rate is oftentimes even less. This has driven prepayment speeds on Fannie Mae 30-year mortgage bonds 117% higher year-to-date -- their fastest since at least 2004. Speeds on Ginnie Mae 30-year bonds have increased 52% over the same time frame, according to data compiled by Bloomberg.