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Truist maintained “Hold” ratings on D.R. Horton, Meritage Homes and Lennar, warning that rising mortgage rates will weigh on the homebuilding sector, particularly more affordable builders, according to a Tuesday research note.
The warning follows SIFMA data showing agency mortgage-backed securities issuance reached $374 billion in Q3 2026, up just 6% year over year. Growth slowed sharply from 35% in Q1 and 22% in Q2, while September issuance rose only 2% year over year. Trading volume for agency MBS in the to-be-announced market fell 16% year over year, worse than the 9% decline in Q2, while dollar trading volume dropped 6%.
Mortgage-backed securities prices fell about 4% during the quarter, with most of the decline occurring in September. Meanwhile, 30-year fixed mortgage rates rose nearly 100 basis points in Q3, largely during September.
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