The November prepayment report will be out Tuesday evening. Street consensus predicts speeds to slow around 15% to 16% in FNMAs and slightly less in GNMAs. In midweek comments from JPMorgan Securities, analysts are anticipating speeds will slow less than market expectations - around 10%. They say that, based on anecdotal closing information, the fewer collection days in November may not have a meaningful impact. Currently, JPMorgan analysts predict paydowns at $46 billion and net fixed-rate supply to be $20 billion.
Factors impacting the report include November's 20 day count versus 20.5 in October, an increase in mortgage rates to an average of 6.07% in October compared to 5.77% in September, and a decline in the Refinance Index to an average of 1970 in October versus 2191 in September. Looking ahead, Street consensus is currently predicting speeds will slow around 10% in December and 15% to 20% in January.