With the non-seasonally adjusted Refi index shooting up by more than 15% last week and a continuing rally in rates, the mortgage market is positioned at the cusp of a moderate-size refinancing wave, sources say.

"If we go a little lower from here in rates, we will have a pretty good Refi wave that takes 8.5s to above 30 constant prepayment rate (CPR) and 8's above 20 CPR," said Art Frank, the head of MBS research at Nomura Securities. "But if we go back up to 7.30% on the current coupon, we probably won't have that Refi wave."

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.