Mortgage flows last week were relatively light reflecting the holiday-shortened session. Originator selling averaged less than $1 billion per day and was focused in 5s and 5.5s. For the most part, buyers were sidelined due to the rich levels and limited carry advantage. Over the week, spreads on 30-year Fannie Maes widened one and two basis points, respectively, for 5s and 5.5s. Meanwhile, 6s were five basis points weaker, while 6.5s were three basis points tighter. Spreads on dwarf 4.5s through 5.5s were four basis points wider over the week.

Mortgage applications rise as rates dip.

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