At the start of the year, supply/demand technicals were deemed generally supportive to the market, despite the Federal Reserve's impending exit. Net issuance was estimated at around $320 billion for the year with the Fed's final-quarter purchases totaling $139 billion.
Many MBS analysts, however, have since revised their supply outlook downward. So far through March, net issuance of Fannie Mae, Freddie Mac and Ginnie Mae totals negative $38.6 billion, impacted by the GSEs' delinquency buyouts. Negative net issuance is projected again in April as GSE issuance is expected to remain negative, with only Ginnie Mae positive. Outside of the delinquency buyouts' impact to supply, refinancing activity has been and remains muted as a result of the declines in home prices, the tight lending standards and poor labor market conditions - despite fixed mortgage rates near record lows and affordability conditions remaining very favorable.