Maybe it is if the focus is on the mortgage-backed securities market. More specifically on privately-issued mortgage bonds. Just a few months ago there was hardly any market for them at all, and if there were one, the prices of them were on life support.
But now this particular sector is stirring. At least a little bit. Mortgage bonds secured by 30-year fixed-rate prime paper issued in 2006-07 traded for 55 cents on the dollar in March, reports Amherst Securities Group, a dealer and market maker in mortgage-backed securities. That was then, now the same paper is going for almost 80 cents to the dollar. A nice improvement in about three months. It shows that private money is slowly returning to the home loan marketplace, that investors see some stability and viability in it. This should especially help out in the jumbo mortgage segment where private financiers have historically played a major role.
This seems to be just one of the first steps toward a healthier mortgage environment. As long as there is interest toward the market, that's a positive sign, instead of scaring investors to run away from it. The fundamentals, though, are still rather distorted and it'll take many months to right them. But a small encouraging advance here and there is what's needed to get the momentum changed and this appears to be one of those.