With interest rates rising, spreads widening and home starts falling, investors are agreeing that the mortgage market is still healthy. But disagreement arises when it comes to what to do with these factors reacting the way they are.
Spreads have tightened more than 25 basis points since August, when they topped out at 190 over Treasurys. As of Oct. 20, the spread had been reduced to an average of 158 basis points. However, many analysts and investors foresee the spreads widening slightly more before the end of the year.