Even with the recent positive home price acceleration data from the Office of Federal Housing Enterprise Oversight, the rise of fixed mortgage rates has fueled discussion on the Street about a slowing housing market and its effect on MBS prepayments.

In a recent report, JPMorgan Securities analysts said that 30-year and 15-year prepayments have converged slightly, a trend that could continue in a softer housing market. When the housing sector was less heated, prepayment rates on 15-year discounts were typically similar to or even faster than those on their 30-year counterparts.

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