RMBS market rides high, but risks loom for H2

For the rest of 2025, it’s an open question if the non-agency mortgage-backed securities market maintains its strong performance from the first six months, given the backdrop of tariffs, economic uncertainty and housing affordability, said Morningstar DBRS.

Issuances in the first six months of 2025 topped volume for the same period in 2024 and credit performance was “in check,” the report said.

“Heading into the second half of the year, possibly disruptive political influences still loom and the economic landscape looks to be a little less robust, but the near-term environment for mortgage, housing, and RMBS will likely still include continued modest home sales, some home price appreciation, and mortgage rates remaining in the 6%–7% range, absent any significant economic shifts,” it…