According to Wall Street Analysts prepayments on U.S. mortgage-backed securities
increased in February as rising seasonal factors and modestly higher refinancing offset a drop in calendar days.
Overall fixed-rate agency prepayment speeds rose by 4 percent in February, with the paydowns increasing from $33
billion to $35 billion, according to JP Morgan. Paydowns should increase by 30 percent to $45 billion in March.
Prepayment speeds are key factors for investors to determine the value of mortgage bonds. If prepayments rise or fall too quickly, they hurt returns on mortgage securities. January prepayment levels were mostly in line with market expectations.
