August 14, 2013
In June prepays stayed above 7% for the second month in a row and for the 4th time this year.
The reason for the move into the 7s is the same one I have given all year. Voluntary prepayments have begun to recover while defaults remain near all-time lows.
As for the detail, overall prepayments rose 8.36% to 7.59% from 7.00% in May.
In comparing prepayment speeds for the first six months of 2013 to the same period in 2012, we see that this year continues to run 25% ahead of 2012, with YTD CPRs at 6.88% versus 5.52%.
As for the largest sector of the market, 20+ years to maturity, prepayment speeds rose by 12.45% to 6.58% from 5.85% in May.