Monday Morning Cup of Coffee: Is housing strong enough to weather rate hikes?

Monday Morning Cup of Coffee: Is housing strong enough to weather rate hikes?

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Investments / The Ticker

FBR Capital: Yield, credit risk and securitization boom carries into new year

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With the announcement of the Federal Open Market Committee on Dec. 12 posting that rates remained unchanged, there are three primary themes developing in the structured finance space and mortgage real estate investment trusts for 2013, according to FBR Capital's 2013 Financial Services/Real Estate Outlook: Honing In on Next Year's Winners.

Generally speaking, yield and more specifically, spread product are expected to remain in high demand.

More so than interest rate risk, credit risk will remain in focus, especially with a housing recovery continuing to gain momentum well into the new year. 

Certain aspects of the securitization market, such as collateralized loan obligation and commercial mortgage-backed securities, which posted a significant increase this year is projected to carry over into 2013.

The company also posted the top five stocks to own in the new year including Flagstar Bancorp (FBC), PHH Corporation (PHH) and Capital One Financial (COF).

cmlynski@housingwire.com 

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