Prepays to Drop 20% This Month: Credit Suisse
There will be 20% drop in 30-year prepayments and an 18% decline in the 15-year January speeds due to higher rates and pronounced seasonal slowing, according to Credit Suisse’s forecast.
“Speeds should continue to drop in February by an additional 10%-15% on lower day-count and a further increase in the driving mortgage rates,” Credit Suisse researchers said in a forecast report revised Friday.
Aggregate 30- and 15-year conventional speeds in December were up but by less than expected at 3% and 4%, respectively.
Stable Ginnie Mae speeds also were slower than expected in December, when researchers had expected an increase.