The 30-year fixed rate agency MBS market is expected to dip significantly in May. JPMorgan Securities said that based on gross production up until May 29th, the amount of outstanding 30-year agency MBS is projected to decrease by well over $30 billion. Analysts said that this would be the largest one-month decline on record.
The same thing was said last month, when the 30-year sector dipped by over $28 billion. The rise in paydowns in May/June along with a sustained high share of refinancings down the curve is accelerating the drop in outstanding 30-years, stated the firm.