Mortgage Rates Climb and Cheap MBS Leave Buyers on Pause

U.S. mortgage rates track the 10-year Treasury note closely, so rising Treasury yields feed straight through to higher borrowing costs for homebuyers. Matthew Johannes, StoneX MD and Head of Agency MBS Trading, explains what rising yields are doing to the agency mortgage-backed securities market. Agency mortgage-backed securities have cheapened as yields climb, with negative convexity and hedging by leveraged holders adding selling pressure while buyers pause. Higher mortgage rates are squeezing housing affordability, and COVID-era borrowers holding low rates are reluctant to move. Discover Actionable Insights with StoneX Market Intelligence: https://shop.stonex.com/products/stonex-essential-bundle?selling_plan=4455759972&variant=45955323625572&utm_source=youtube&utm_medium=social&utm_campaign=sxtv_guest_matthew_johannes&utm_content=share 00:00 - Mortgage Bonds Meet Yield Heat 00:36 - Agency MBS Hit Full Extension 01:44 - Convexity Hedging Piles On 02:33 - Mortgage Rates Chase 10-Year 03:12 - Affordability Hits a Rate Wall 04:15 - COVID-Era Borrowers Stay Put Like and subscribe for more financial market insights. #MortgageRates #StoneX #MatthewJohannes #Treasuries -------- Like this video? Subscribe and turn on notifications so you don't miss any videos from StoneX: https://www.youtube.com/@stonex_official Visit https://www.stonex.com/en/insights/thought-leadership/?utm_source=youtube&utm_medium=social for insights, perspectives and thought leadership from StoneX's global network of experts. Visit our website: https://www.stonex.com?utm_source=youtube&utm_medium=social