With the August prepayment report due out by the end of next week, investors are already asking about how slow prepay speeds can get.

Kevin Jackson, vice president at RBC Dain Rauscher said that this would depend on the rate of home price appreciation and housing turnover. “We think it is plausible in the current environment to run speeds that imply a moderate home price path over the next year and somewhat faster after that,” said Jackson. “This is as an important time as any to run mortgage cash flows using the most appropriate vectors.”

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