Banks are competing to increase their holdings of mortgage-backed securities, with asset returns reaching a new high since 2002

Bank holdings surge: The U.S. banking industry is aggressively buying mortgage-backed securities (MBS). As of the end of December, the relevant positions held by commercial banks have exceeded $2.7 trillion, reaching the highest level since 2023. 2026 outlook: Driven by factors such as increased deposits, attractive interest rate spreads, and relaxed capital regulatory rules, banks are expected to continue purchasing such bonds in 2026. Demand forecast: This year, the demand for mortgage-backed securities is bullish. It is estimated that the scale of bank procurement will be between $25 billion and $105 billion. Due to strong demand and relatively insufficient net supply, interest rate spreads are expected to narrow further