The State of Housing Edition – 18 October 2023
This week in a special edition podcast episode, George Goncalves, MUFG Head of U.S. Macro Strategy, is joined by Glenn Schultz, MUFG Head of Prepayment Modeling and Strategy, to go over a recently published and comprehensive Desk Strategy Report called “The State of Housing” where they explore the impact of high mortgage rates and affordability issues that are impacting the U.S., as well as the potential lasting effect on housing and mortgage macro fundamentals ahead.
George walks through how these higher rates are unsustainable for a viable housing and mortgage financing market and unless incomes were to rise, and rise at a much faster rate, that something has to give (either house prices decline, and/or rates decline). Glenn threads in the implications to MBS issuance, CPRs, and how the market might be the most negative convexity it has been given the larger loan balances. George wraps things up by discussing how this might influence the Fed rate views and their MBS portfolio.
To hear more, click the image below and for the full desk strategy report on “The State of Housing” – click here.