With refinancings and cash-outs waning, net fixed-rate supply for this year is expected to be the lowest since 2000. However, JPMorgan Securities analysts still estimate roughly $10 billion in net MBS fixed-rate supply for the next month as the tail of first quarter refinancings are securitized. After this, net supply will probably drop again, they said.

With refinancings and cash-outs slowing down in response to rising rates, net fixed-rate supply is expected to stay exceptionally low. JPMorgan believes the rate of new home sales is not enough to continue stimulating growth in the fixed-rate MBS sector. The current rate of new home sales merely suggests a 2% annual growth in net fixed issuance.

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