Mortgages continued to grind tighter last week as the technical situation remained the dominant theme. Spreads in current coupon 15s and 30s moved in five basis points over the Wednesday-to-Wednesday period. Meanwhile, 6.5% and 7% coupons were seven to eight basis points firmer on some up-in-coupon interest that has crept into the market. In comments from RBS Greenwich Capital, analysts note that interest in fuller coupons may be premature. They say that as long as the market remains range bound, and mortgage banker staffing levels high, homeowners with higher mortgage rates will be getting calls to refinance. The bottom line, say researchers from RBS Greenwich, is higher coupons may not burn out as quickly as expected.
Refi Index holds firm on low rates