US banks return to MBSs amid value recovery
Bank of America and Wells Fargo ramp up AFS holdings in the third quarter
US banks showed a renewed appetite for mortgage-backed securities (MBSs) in the third quarter as unrealised losses on the instruments fell sharply.
Across 41 reporting banks, available-for-sale (AFS) MBS balances rose 8.1% to $906.5 billion – the highest amount since Q2 2022.
The bulk of the increase came from pass-through residential MBSs (RMBSs), which climbed 10.5% to $584.6 billion, while other
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