Mortgage Backed Securities Vs Mortgage Rates

A common misconception is that mortgage rates are set by the federal reserve.
Mortgage backed securities vs mortgage rates. A blog featuring up to the minute commentary on mortgage rates and the mortgage backed securites markets. 30yr fnma 4 5 108 04 0 02 30yr fnma 5 0. Mortgage backed securities tend to be more sensitive to changes in interest rates than other bonds because changes in interest rates affect both the mortgage backed bond and the mortgages within it. This is known as negative convexity and is one reason why mbss offer higher yields than u s.
How mortgage backed securities affect interest rates mbs are affected by the same types of economic and market factors as bonds with one exception. This risk can be reduced by diversifying the maturities and characteristics of mortgage backed investments. That s not true rates follow prices for mortgage backed securities mbs. A discussion of mortgage backed securities and their affect on mortgage rates.
30 yr frm 3 05 15 yr frm 2 68 jumbo 30 year fixed 3 40 mbs prices.