After two years of limited demand, private equity and insurance companies are increasing their allocations to single family residential mortgages. This increased flow of funds appears to be driven by strengthening macro factors that favor residential mortgages over other yield assets such as commercial real estate (CRE) and commercial (C&I) loans. These strong fund flows are resulting in tighter credit spreads, higher prices, and an increased focus on sourcing new originations.
Mortgage investors are pointing to several factors leading to increased demand for mortgages in the current environment, including: the end of the current rate-hike cycle, government details ⇒
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