China's potential selling of U.S. MBS could push up mortgage rates significantly

From CNBC: 2025-04-09 14:27:00

Mortgage rates are surging this week as investors sell U.S. Treasury bonds rapidly. Concerns arise over China potentially selling off MBS in response to U.S. trade policies, further driving up rates. Foreign countries currently own $1.32 trillion worth of U.S. MBS, with China already decreasing its holdings last year.

If China and Japan accelerate MBS sales, mortgage rates could skyrocket. Widening spreads could result in higher rates, exacerbating the struggling spring housing market. With high home prices and weakening consumer confidence, potential buyers are already anxious about savings and employment. The Federal Reserve’s balance sheet reduction adds additional pressure on mortgage rates.



Read more at CNBC: How China could crush the U.S. housing market