Mortgage Bond Prices Tumble After Months of Gains
2009 November 9
U.S. home-loan bonds without government backing slumped after almost three months of gains, as supply overwhelmed demand amid concern that the housing market hasn’t bottomed.
So-called non-agency mortgage securities generally declined last week by 2 cents to 4 cents on the dollar, or almost 7 percent in some cases, as sales “swamped the market,” according to a Barclays Capital Inc. report November 6.
“While some of the supply could be attributed to year-end selling by various accounts, hedge funds and money managers have also been looking to book profits before the expected downturn in housing in the winter months,” Barclays analysts led by Ajay Rajadhyaksha in New York wrote in the report.
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