BNP Paribas Backs Mortgage-Backed Securities as 30-Year Rates Hold at 6.61%
Updated
Updated · ETF Trends · Jul 21
BNP Paribas Backs Mortgage-Backed Securities as 30-Year Rates Hold at 6.61%
2 articles · Updated · ETF Trends · Jul 21
Summary
Agency mortgage-backed securities remain fundamentally strong, BNP Paribas said, arguing elevated mortgage rates are supporting the sector rather than undermining it.
At 6.61%, the national average 30-year fixed mortgage rate is curbing refinancing, housing turnover and new originations, which keeps net MBS supply low and cash flows more predictable.
An 11% drop in June prepayment speeds for 30-year FNMA aggregates reinforced that view, with BNP saying refinancing slowed more than expected in higher-coupon pools.
WisdomTree’s actively managed MTGP ETF reflects that appeal with a 4.31% 30-day SEC yield, while BNP said narrowing spreads still leave medium-term returns supported mainly by carry.