As the year draws to a close for the mortgage-backed securities market, quiet trading floors and thin activity were slowly replaced with a low buzz about - could it be? - a distinct comeback for mortgages in 2000.
"Activity will pick up fairly rapidly," said Dale Westhoff, a managing director in the mortgage department at Bear, Stearns & Co. "I think six months ago, there were very few market participants who thought activity would be as good as it has been in December, and that spreads would be as tight. I think it will be fairly brisk right out of the box next year. Mortgage product in particular is in a very good technical position right now, because we're projecting total fixed-rate MBS supply to drop below $25 billion per month."