Prepay Speeds Holding Steady in Recent Monthly Data: 'The cooling housing market is starting to take its toll on discount speeds.'.

Prepayment rates for 30-year mortgages in Fannie Mae and Freddie Mac mortgage-backed securities were little changed in April, according to the Bear Stearns Prepayment Commentary.

"Improving seasonal factors supporting housing turnover and a 12-basis-point rally in mortgage rates were offset by the cooling housing market and a two-day decline in the business calendar (counting Good Friday as a holiday)," said Bear Stearns analysts Dale Westhoff and V.S. Srinivasan.

The aggregate speed of 30-year Fannie Maes was a constant prepayment rate of 11.8 CPR, unchanged from that of the previous month, and 10.9 CPR for comparable Freddie Macs, up from 10.7 CPR in March.

Premium coupon speeds "showed very little response to the recent rally in rates," as Fannie 6.0s rose only 1.4 CPR and Fannie 6.5s declined 0.1 CPR.

Meanwhile, aggregate speeds for 30-year Ginnie Mae collateral were also "relatively unchanged" in April, the analysts said.

In the agency hybrid sector, speeds accelerated by 4%-5%, faster than in the fixed-rate sector, according to Bear Stearns. Most of the acceleration was concentrated in 3/1 and 5/1 hybrids, while the speeds of 10/1 hybrids fell modestly.

The analysts reported that prepayments are running 20% slower this year than last when controlled for seasoning and relative coupons.