How does the movement of the market of Mortgage Backed Securities affect home prices?

Question

How does the movement of the market of Mortgage Backed Securities affect home prices?

In: 5

Answer 1

I would perhaps say that movements in the pricing of MBS reflect factors that ultimately influence home prices, one of which are interest rates. One of the drivers in MBS prices are going to be interest rates, which ultimate go into setting mortgage rates (particularly adjustable rate mortgages) and consequently home prices.