Author: Just Summit Editorial Team
Source: Morgan Stanley
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Agency MBS markets are facing headwinds from higher rates and slower prepayment speeds. This is causing duration extension and hurting performance.
Housing supply remains tight, supporting prices despite affordability challenges. Homebuilders are seeing improved sentiment, but still face construction cost pressures.
Watch mortgage rate trends and Fed policy for MBS direction. Housing affordability and builder confidence will dictate further price appreciation.
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