Graph and download economic data for Treasury and Agency Securities: Mortgage-Backed Securities (MBS), All Commercial Banks (H8B1301NCBCQG) from Q4 2009 to Q4 2025 about mortgage-backed, agency, Treasury, securities, banks, depository institutions, and USA.

Graph and download economic data for Treasury and Agency Securities: Mortgage-Backed Securities (MBS), All Commercial Banks (TMBACBW027NBOG) from 2009-07-01 to 2026-03-18 about mortgage-backed, agency, Treasury, securities, banks, depository institutions, and USA.

Agency MBS Market Outlook

According to our latest research, the global Agency MBS market size reached USD 9.8 trillion in 2024, with a robust compound annual growth rate (CAGR) of 5.1% observed over the past year. The market is expected to grow steadily, reaching an estimated USD 15.7 trillion by 2033, driven by factors such as heightened investor demand for stable fixed-income instruments, evolving regulatory frameworks, and ongoing innovation in mortgage-backed securities structuring. As per our latest research, the Agency MBS market is witnessing significant momentum due to its perceived safety, liquidity, and the continued support from government-sponsored enterprises (GSEs).

One of the primary growth factors for the Agency MBS market is the persistent demand for yield in a low-interest-rate environment. Institutional investors, including pension funds, insurance companies, and asset managers, are increasingly allocating capital to Agency MBS due to their attractive risk-adjusted returns and implicit government backing. The market’s resilience during periods of economic uncertainty further enhances its appeal, with investors seeking the safety net provided by Ginnie Mae, Fannie Mae, and Freddie Mac. Additionally, the ongoing expansion of the global middle class and rising homeownership rates, particularly in North America and Asia Pacific, are fueling the origination of underlying mortgages, thereby expanding the pool of eligible assets for securitization.

Technological advancements and digitalization are also playing a pivotal role in the Agency MBS market’s growth trajectory. Enhanced data analytics, automated underwriting processes, and blockchain-based securitization platforms are improving transparency, efficiency, and risk assessment in the mortgage origination and securitization value chain. These innovations are not only reducing operational costs but also enabling more granular risk segmentation and tailored product offerings. Moreover, regulatory reforms aimed at increasing market stability—such as stricter capital requirements and enhanced disclosure standards—are fostering greater investor confidence and participation, particularly among global institutional investors seeking diversification.

Another key driver is the evolving regulatory and macroeconomic landscape. The proactive involvement of central banks, especially the U.S. Federal Reserve, in purchasing Agency MBS as part of quantitative easing programs has provided a significant liquidity buffer and compressed spreads, making these securities even more attractive. Furthermore, the gradual normalization of monetary policy is expected to create new opportunities for active portfolio management and trading strategies within the Agency MBS space. The combination of strong government support, robust investor demand, and continuous product innovation is positioning the Agency MBS market for sustained growth over the forecast period.

Regionally, North America continues to dominate the Agency MBS market, accounting for over 70% of global issuance in 2024, driven by the deep and liquid U.S. secondary mortgage market, strong regulatory oversight, and the presence of major GSEs. Europe and Asia Pacific are emerging as growth frontiers, with increasing adoption of securitization frameworks and rising cross-border investment flows. While Latin America and the Middle East & Africa currently represent smaller shares, ongoing financial sector reforms and efforts to deepen local capital markets are expected to provide new growth avenues in these regions. Overall, the global Agency MBS market is characterized by a dynamic interplay of macroeconomic, regulatory, and technological factors, underpinning its long-term growth outlook.

Product Type Analysis

The Agency MBS market is broadly segmented by product type into Pass-Throughs, Collateralized Mortgage Obligations (CMOs), Stripped MBS, and Others. Pass-Through securities remain the dominant product type, accounting for appr

Mortgage-Backed Securities (MBS) Market Outlook 2025-2034

The global mortgage-backed securities (MBS) market was valued at $12.4 billion in 2025 and is projected to reach $22.1 billion by 2034, expanding at a compound annual growth rate of 6.6% during the forecast period from 2026 to 2034. Mortgage-backed securities represent a category of asset-backed investment instruments secured by pools of mortgage loans, providing investors with periodic cash flows derived from underlying mortgage payments. The MBS market occupies a structurally critical position within global fixed-income capital markets, enabling mortgage originators to offload credit risk, recycle capital, and extend lending capacity to homebuyers and commercial real estate developers worldwide. Throughout 2025, strengthening residential real estate demand across North America and Asia Pacific, combined with normalization of interest rate conditions following the monetary policy tightening cycle of 2022-2023, has reinvigorated primary mortgage origination volumes, thereby expanding the pipeline of mortgages available for securitization. The growing appetite of institutional investors, including pension funds, insurance companies, sovereign wealth funds, and asset managers, for investment-grade, yield-generating instruments with defined duration profiles continues to underpin secondary market demand for both agency and non-agency MBS. Additionally, regulatory modernization efforts across Europe and Asia Pacific are expanding the legal and operational frameworks necessary to support domestic MBS issuance, enabling new pools of mortgage assets to enter the global securitization ecosystem. The interplay between credit quality management, prepayment risk modeling, and interest rate sensitivity analytics is becoming increasingly sophisticated, with market participants leveraging artificial intelligence and machine learning tools to price and manage MBS portfolios with greater precision than at any prior point in the market's history. By 2026, the market is expected to benefit further from the Federal Reserve's projected interest rate normalization, which will stimulate refinancing activity, generate new mortgage originations, and deepen the supply of securitizable loan pools available to issuers in the United States and other key markets.

United States - Treasury and Agency Securities: Mortgage-Backed Securities (MBS), All Commercial Banks was 2680.14800 Bil. of U.S. $ in April of 2025, according to the United States Federal Reserve. Historically, United States - Treasury and Agency Securities: Mortgage-Backed Securities (MBS), All Commercial Banks reached a record high of 2993.08500 in February of 2022 and a record low of 959.13700 in October of 2009. Trading Economics provides the current actual value, an historical data chart and related indicators for United States - Treasury and Agency Securities: Mortgage-Backed Securities (MBS), All Commercial Banks - last updated from the United States Federal Reserve on March of 2026.

The year 2021 saw the peak in issuance of residential mortgage backed securities (MBS), at *** trillion U.S. dollars. Since then, MBS issuance has slowed, reaching *** trillion U.S. dollars in 2025. What are mortgage backed securities? A mortgage backed security is a financial instrument in which mortgages are bundled together and sold to investors. The idea is that the risk of these individual mortgages is pooled when they are packaged together. This is a sound investment policy, unless the foreclosure rate increases significantly in a short amount of time. Mortgage risk Since mortgages are loans backed by an asset, the house, the risk is often considered relatively low. However, the loan maturities are very long, sometimes decades, meaning lenders must factor in the risk of a shift in the economic climate. As such, interest rates on longer mortgages tend to be higher than on shorter loans. The ten-year treasury yield influences these rates, since it is a long-term rate that most investors accept as risk-free. Additionally, a decline in the value of homeowner equity could lead to a situation where the debtor is “underwater” and owes more than the home is worth.

30-Year mortgage rate minus 10-Year Treasury yield — proxy for MBS risk premium.

Agency MBS Market Outlook

According to our latest research, the global Agency MBS (Mortgage-Backed Securities) market size reached USD 9.3 trillion in 2024, reflecting the robust demand for securitized mortgage assets worldwide. The Agency MBS market is expected to expand at a CAGR of 4.2% from 2025 to 2033, with the market forecasted to reach USD 13.3 trillion by 2033. This growth is driven by the increasing appetite for fixed-income securities among institutional investors, ongoing government support for housing finance, and the evolution of risk management strategies in the global financial ecosystem.

One of the primary growth factors for the Agency MBS market is the consistent demand for safe, liquid, and yield-generating assets in a low-interest-rate environment. Agency MBS, backed by government-sponsored enterprises (GSEs) such as Fannie Mae, Freddie Mac, and Ginnie Mae, offer investors a unique blend of credit risk mitigation and attractive returns compared to other fixed-income instruments. The explicit or implicit government guarantee associated with these securities further enhances their appeal, particularly during periods of economic uncertainty. Additionally, the expansion of mortgage lending and refinancing activity, especially in developed markets, has fueled the supply of new Agency MBS, supporting market growth.

Another significant driver is the evolving regulatory landscape that encourages financial institutions to hold high-quality liquid assets (HQLA) for capital adequacy and risk management purposes. Agency MBS are typically classified as HQLA under Basel III regulations, making them a preferred choice for banks and other financial institutions seeking to optimize their balance sheets. Moreover, technological advancements in securitization, data analytics, and trading platforms have improved transparency, efficiency, and accessibility in the Agency MBS market, attracting a broader range of investors, including retail participants and non-traditional asset managers.

The diversification of investor profiles and the globalization of capital flows have also contributed to the expansion of the Agency MBS market. International investors, sovereign wealth funds, and central banks are increasingly allocating capital to Agency MBS as part of their portfolio diversification and risk-adjusted return strategies. This influx of global capital has enhanced market liquidity and depth, while also fostering innovation in product structures and risk transfer mechanisms. Furthermore, the growing recognition of Agency MBS as a tool for macroprudential policy and monetary operations by central banks underscores their strategic importance in the global financial system.

From a regional perspective, North America continues to dominate the Agency MBS market, accounting for the majority of issuance, trading volume, and investor participation. The United States, in particular, benefits from a mature mortgage finance system, strong regulatory oversight, and the presence of major GSEs. However, other regions such as Europe and Asia Pacific are witnessing steady growth, driven by financial market development, regulatory harmonization, and increasing cross-border investment flows. The regional dynamics are further influenced by macroeconomic factors, housing market trends, and government policies aimed at supporting homeownership and financial stability.

Product Type Analysis

The Agency MBS market is segmented by product type into Residential MBS, Commercial MBS, Collateralized Mortgage Obligations (CMOs), and Pass-Through Securities. Residential MBS remain the largest segment, underpinned by the substantial volume of residential mortgage loans originated and securitized by GSEs. These securities are widely regarded as a cornerstone of the fixed-income market, providing investors with exposure to the U.S. housing market and a steady stream of principal and interest payments. The standardized nature and government backing of residential MBS contribute to their high liquidity and low credit risk profile, making them a staple in institutional portfolios.

Commercial MBS, while smaller in scale compared to their residential counterparts, have gained prominence as institutional investors seek diversification across property types and geographic locations. These securities are backed by income-generating commercial real estate assets such as office buildings, shopping centers

Graph and download economic data for Rest of the World; U.S. Mortgage-Backed Securities and Other U.S. Asset-Backed Bonds; Asset, Market Value Levels (BOGZ1LM263063603Q) from Q4 1945 to Q4 2025 about asset-backed, mortgage-backed, market value, bonds, securities, assets, and USA.

Graph and download economic data for U.S.-Chartered Depository Institutions; Private Residential CMOs and Other Structured MBS; Asset, Market Value Levels (BOGZ1LM763063663A) from 1945 to 2025 about mortgage-backed, market value, residential, assets, private, and USA.

MFA Financial (“MFA”) Series C fixed-to-floating rate cumulative redeemable preferred stock is an attractive short duration fixed income instrument that I expect to generate approximately a 25% IRR and 40% total return over the next year and a half.

The opportunity exists because 1.) the interest rate and mortgage spread environment over the last two years has presented a challenging backdrop for levered long fixed income investing strategies, 2.) one mortgage REIT peer took a surprising position with respect to the LIBOR transition, and 3.) preferred instruments broadly have been out of favor.

I believe the go forward environment for mortgage REITs is conducive to generating positive economic returns, PMT’s position with respect to LIBOR transition is the exception rather than the rule, and there are early signs of increased investor demand for preferred instruments.

MFA Series C preferred will begin paying quarterly dividends at an annual rate of 5.345% over 3-month term SOFR as of March 31, 2025. Mortgage REIT fixed-to-floating rate preferreds that have already reset to floating rate such as AGNC Series C (+5.111%), Annaly Series F (+4.993%) and Annaly Series G (+4.172%) trade at or near par (98% to 101% of par).

Assuming MFA Series C preferred trades at 95% of par once the first floating rate dividend is paid in June 2025, this preferred will generate an approximate 25% IRR and 40% total return. Assuming MFA Series C preferred trades at par once the first floating rate dividend is paid, this preferred would generate a 29% IRR and 48% total return.

AGNC on 10/31/2023: “Our outlook for Agency MBS is very favorable. Spreads have decoupled from treasuries and corporates due to supply and demand technical factors that we expect will ease over time…spreads and other fixed income sectors are close to post-GFC long-term averages, which spreads on Agency MBS are in the 95-plus percentile area.”

MFA on 11/7/2023: “Mortgage spreads are indeed very wide today, but they were at similar levels in 1986, and ’87, in 1999 and 2000 and in 2008 before the Fed began its first round of QE.”

The PMT LIBOR transition wrinkle

PennyMac Mortgage Investment Trust (“PMT”) is a mortgage REIT with two series of fixed-to-floating rate preferred stock. On August 25, 2023, PMT issued a press release stating their position that the Federal Reserve’s LIBOR rule would result in PMT’s fixed-to-floating rate preferred not transitioning to a floating reference rate as a result of USD LIBOR being phased out.

PMT’s press release can be found here.

I believe PMT has taken an aggressive and unique position and am not aware of any other company that has or has indicated an intent to take a similar position. I believe that MFA’s Series C preferred will transition to floating, as scheduled, with the floating benchmark referring to Term SOFR rather than LIBOR for the following reasons:

Fixed 30-year mortgage rates in the United States averaged 6.43 percent in the week ending March 20 of 2026. This dataset provides the latest reported value for - United States MBA 30-Yr Mortgage Rate - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.

See the 2024-2025 trend comparing Freddie Mac's PMMS to actual MBS mortgage rates. Discover why real lender rates are often lower and how this spread impacts lender.

Graph and download economic data for Treasury and Agency Securities: Mortgage-Backed Securities (MBS), Domestically Chartered Commercial Banks (H8B1301NDMCMG) from Aug 2009 to Feb 2026 about charter, mortgage-backed, agency, Treasury, domestic, securities, banks, depository institutions, and USA.

Graph and download economic data for Treasury and Agency Securities: Non-MBS, All Commercial Banks (TNMACBM027SBOG) from Jul 2009 to Feb 2026 about non-mortgage-backed, agency, Treasury, securities, banks, depository institutions, and USA.

For investors seeking the income diversification of mortgaged-back securities with targeted duration. The Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the ICE BofA Constrained Duration US Mortgage Backed Securities Index (Underlying Index).

The year 2021 saw the peak in issuance of residential mortgage backed securities (MBS), at 3.7 trillion U.S. dollars. Since then, MBS issuance has slowed, reaching 1.2 trillion U.S. dollars in 2023. What are mortgage backed securities? A mortgage backed security is a financial instrument in which mortgages are bundled together and sold to investors. The idea is that the risk of these individual mortgages is pooled when they are packaged together. This is a sound investment policy, unless the foreclosure rate increases significantly in a short amount of time. Mortgage risk Since mortgages are loans backed by an asset, the house, the risk is often considered relatively low. However, the loan maturities are very long, sometimes decades, meaning lenders must factor in the risk of a shift in the economic climate. As such, interest rates on longer mortgages tend to be higher than on shorter loans. The ten-year treasury yield influences these rates, since it is a long-term rate that most investors accept as risk-free. Additionally, a decline in the value of homeowner equity could lead to a situation where the debtor is “underwater” and owes more than the home is worth.

Graph and download economic data for Repurchase Agreements: Mortgage-Backed Securities Purchased by the Federal Reserve in the Temporary Open Market Operations (RPMBSD) from 2000-01-03 to 2026-03-27 about mortgage-backed, repurchase agreements, purchase, trade, securities, and USA.

The Fund seeks to generate income by investing primarily in short-duration, investment-grade securitized debt across asset-backed securities (ABS) and mortgage-backed securities (MBS), including commercial and residential MBS. A disciplined, time-tested investment process and rigorous risk management approach seeks to target ABS and MBS with competitive yield and current income across undervalued areas of securitized credit markets.Effective November 28, 2025, this Fund's name changed from Virtus Newfleet ABS/MBS ETF.

Graph and download economic data for Assets: Securities Held Outright: Mortgage-Backed Securities: Wednesday Level (WSHOMCB) from 2002-12-18 to 2026-03-25 about outright, mortgage-backed, securities, assets, and USA.