man walking down stairs of his home Source: Bloomberg.

The Freddie Mac 30-year mortgage rate has dropped to 3.51%, its lowest level since Sept. 5, increasing pressure on a sector that was already set for its worst monthly performance for January since 2016.

A key feature of mortgage-backed securities is the fact that the underlying home loans may be prepaid by borrowers at par at any time. With almost the entire MBS universe changing hands at a premium, getting back funds faster than expected can hurt performance.

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