Housing Market Closely Watching Foreign MBS Holdings

Analysts are concerned that China and other foreign countries – which own approximately $1.32 trillion of U.S. mortgage-backed securities (MBS) — could offload their MBS holdings in retaliation to President Trump’s tariffs. Major sales of MBS would put upward pressure on mortgage rates. Additionally, the Federal Reserve is also working to offload MBS from its balance sheet. With the U.S. housing markets struggling to pick up, higher mortgage rates would further slow demand. 

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