Agency Mortgage REITs "Week 1 Earnings Recap: Agency Spread Tightening..."

Research evidence excerpt

Agency Mortgage REITs "Week 1 Earnings Recap: Agency Spread Tightening..."

Global Research

24 July 2026ab

Agency Mortgage REITs Equities

AmericasWeek 1 Earnings Recap: Agency Spread

Tightening Drives 2Q Gains; July Retraces a Diversified Financial

Portion MarissaAnalystLobo

marissa.lobo@ubs.com

+1-212-713 3922

Week 1 results for Agency-MBS focused mREITS reporting largely aligned with our Cory Johnson

Associate Analystconstructive view on 2Q market conditions. Agency MBS focused portfolios gained from

cory.johnson@ubs.com

tighter spreads and produced strong economic returns. Across the group, reported book

+1-212-882 0078

values changed by an average of approximately +1.3% QoQ, with economic returns

ranging from 3.8% to 6.7%, averaging roughly 5.4%. Across AGNC, NLY, DX and ARR

management teams highlighted a mortgage market characterized by lower-than-

expected supply, muted refinancing activity, strong fixed-income inflows and ongoing

support from GSE purchases. While concerns around inflation, geopolitical tensions and

Fed policy remain elevated, the common message was that Agency MBS technicals

remain supportive heading into the second half of 2026.

Top Takeaways

Agency MBS market technicals improved further in 2Q, driven by lower supply and

strong demand.

Most management teams expect longer-term spread tightening, remain

constructive despite macro uncertainty. GSE purchases are increasingly viewed as a

spread backstop.

Book values generally increased +1.3% in 2Q (-0.6% to +2.4% range), though

gains were slightly more modest than we anticipated. Economic returns ranged

from 3.8%-6.7% (average ~5.4%).

Q3 book values have retraced part of Q2 gains with spread widening in July,

resulting in book value declines of roughly 1-3% across the group.